ICA

6
Oct

In Extending .Com RA, ICANN Board also Extended Price Freeze Through 2024

We have previously reported that, at is September 15th meeting, ICANN’s Board approved the proposed extension of the .Com registry Agreement (RA). What we did not know at the time was that the Board simultaneously approved an extension of the existing $7.85 ceiling on .Com wholesale prices through 2024.

 

That additional information recently became available when ICANN published its Preliminary Report | Regular Meeting of the ICANN Board for the September 15th meeting. The full text regarding the Board’s approval of the .Com RA extension is reproduced at the end of this blog, with key provisions related to wholesale pricing highlighted.

 

The key passage in that meeting narrative is:

The Vice Chair informed that Board that staff worked with Verisign to address this comment by proposing to revise the version of the amendment posted for public comment by adding additional language to extend the maximum price provision through 30 November 2024. The Board continued its discussion of the proposed amendment with the understanding that the amendment would be revised to reflect the noted change.

 

A revised version of the adopted RA extension language has also been published. The relevant language change reads as follows:

(b) Section 7.3(d)(i) of the Agreement is hereby deleted and replaced in its entirety by the following new Section 7.3(d)(i): “(i) from the Effective Date through November 30, 2024, US $7.85;”

 

There are two important caveats to keep in mind in understanding the import of this ICANN Board action:

  1. While the revised .Com RA now extends the price freeze through 2024, the issue could be raised again in negotiations between ICANN and Verisign if the US decides not extend the Cooperative Agreement (CA) in 2018, or does extend it but alters the pricing terms. That’s because the RA extension amendment also contains this provision—

Future Amendments. The parties shall cooperate and negotiate in good faith to amend the terms of the Agreement (a) by the second anniversary of the Amendment Effective Date, to preserve and enhance the security and stability of the Internet or the TLD, and (b) as may be necessary for consistency with changes to, or the termination or expiration of, the Cooperative Agreement between Registry Operator and the Department of Commerce.

 

Under that provision, if the CA is terminated or revised in 2018 that would lead to discussion of amendments to the RA necessary for consistency with the CA. The Department of Justice recently advised Senator Cruz that the RA extension has no effect on the .Com price freeze, and that NTIA has the authority to extend the price freeze through 2024.

 

So what ICANN’s Board has done with this action is, in effect, pre-approve an extension of the existing .Com price freeze in anticipation that the NTIA may extend it through 2024. But what NTIA will actually do in the next two years cannot be predicted at this time, and if that agency takes a different course of action then ICANN and Verisign will enter into new discussions to reconcile the RA and CA (or reconcile the RA with the expiration of the CA).

 

  1. By extending the RA now, rather than having it come up for renewal in 2018, the possibility of ICANN staff pushing Verisign to adopt URS or other new gTLD RPMs in .Com contract renewal negotiations – as they did last year for .cat, .pro, and .travel — has been eliminated. That was one of the principal considerations underlying ICA’s non-objection to the RA extension, along with an understanding that it would have no effect on the price freeze.

 

However, adoption of those RPMs by .Com was advocated by trademark and other interests who commented on the proposed RA extension, and could come up in the talks between ICANN and Verisign that the amended RA requires “to preserve and enhance the security and stability of the Internet or the TLD”.

 

But the question of whether and in what form URS should become an ICANN Consensus Policy applicable to legacy gTLDs like .Com will likely be addressed by the RPM Review Working Group when it issues its phase one preliminary report and recommendations in 2017, and its decision should have substantial impact on any subsequent security and stability discussions between ICANN and Verisign.

 

 

Here’s the relevant language of the Preliminary Report —

 

 

.COM Registry Agreement Amendment

Ram Mohan abstained noting potential conflicts of interest. The Vice Chair presented the agenda item. He gave the Board an overview of the proposed amendment to the .COM registry agreement to extend the term of the agreement to 2024. The original term of the registry agreement was set to expire in 2018. He reported that there were some concerns raised during the public comment period about clarifying whether the maximum price provision in the .COM registry agreement would continue. The Vice Chair informed that Board that staff worked with Verisign to address this comment by proposing to revise the version of the amendment posted for public comment by adding additional language to extend the maximum price provision through 30 November 2024. The Board continued its discussion of the proposed amendment with the understanding that the amendment would be revised to reflect the noted change.

The Vice Chair stated that another topic of concern raised during the public comment period was about moving the existing.COM registry agreement to the form of the New gTLD Registry Agreement. The Board considered this concern, and took note of the provision in the proposed amendment obligating Verisign to ICANN to negotiate in good faith in two years potential changes to the registry agreement in order to preserve and enhance the security of the Internet or the TLD.

The Board also discussed the extension of the term of the .COM registry agreement as it relates to other provisions in the existing .COM registry agreement that might allow for future changes of the agreement. As part of this discussion, the Board considered the provisions in the .COM registry agreement concerning renewals being upon similar terms of the largest five gTLDs, and provisions addressing the implementation of consensus policies developed through the GNSO policy development process.

As part of its deliberations, the Board also considered comments raised by some members of the community about whether approving the proposed amendment raised concerns about fairness and whether similarly situated parties were unjustifiably receiving different treatment.

The Board discussed the interplay between the proposed amendment to the .COM registry agreement and the Root Zone Maintainer Services Agreement (RZMA) approved by the Board on 9 August 2016. The Board considered whether the proposed resolutions needed to be revised to make sure the dates of the two agreements would be aligned as anticipated. After discussion, the Board took the following action:

Resolved (2016.09.15.09a), the text of the proposed resolution to amend the .COM registry agreement is modified to make approval of the amendment subject to the execution of the RZMA.

The Board adopted the following amended resolution regarding the proposed .COM amendment2:

Whereas, ICANN and Verisign engaged in discussions on a proposed amendment to the 1 December 2012 .COM Registry Agreement (“Amendment”) and agreed to extend the term of the Agreement to 30 November 2024 to coincide with the term of the Root Zone Maintainer Services Agreement in order to enhance the security, stability and resiliency of root zone operations.

Whereas, the proposed Amendment also requires Verisign and ICANN to cooperate and negotiate in good faith to: (1) amend the .COM Registry Agreement by the second anniversary date of the proposed Amendment in order to preserve and enhance the security of the Internet or the TLD; and (2) as may be necessary for consistency with changes to the Cooperative Agreement between Verisign and the U.S. Department of Commerce. All other terms and conditions in the existing Registry Agreement remain unchanged.

Whereas, ICANN commenced a public comment period from 30 June 2016 to 12 August 2016 <https://www.icann.org/public-comments/com-amendment-2016-06-30-en> on the proposed Amendment. Ninety-nine (99) comment submissions were posted by both individuals and organizations/groups.

Whereas, the Board carefully considered the comments and the staff summary and analysis of comments.

Whereas, ICANN conducted a review of Verisign’s recent performance under the current .COM Registry Agreement and found that Verisign substantially met its contractual requirements.

Resolved (2016.09.15.09b), the proposed amendment to the .COM Registry Agreement <https://www.icann.org/sites/default/files/tlds/com/com-amend-1-pdf-30jun16-en.pdf> is approved, subject to the RZMA being executed, and the President and CEO, or his designee(s), is authorized to take such actions as appropriate to finalize and execute the Amendment.

All members of the Board present voted in favor of Resolutions 2016.09.15.09a – 2016.09.15.09b. One member of the Board was unavailable to vote on the Resolutions. The Resolutions carried.

Rationale for Resolutions 2016.09.15.09a – 2016.09.15.09b

Why the Board is addressing the issue now?

On 1 December 2012, ICANN and Verisign, entered into a Registry Agreement under which Verisign operates the .COM top-level domain. The agreement is set to expire on 30 November 2018. ICANN and Verisign have negotiated a proposed Amendment, which was posted for a 42-day ICANN public comment period between 30 June 2016 and 12 August 2016. At this time, the Board is approving the proposed Amendment for the continued operation of .COM TLD by Verisign.

What is the proposal being considered?

The proposed Amendment: (1) extends the term of the .COM Registry Agreement to 30 November 2024 to coincide with the term of the Root Zone Maintainer Services Agreement (RZMA) between ICANN and Verisign; (2) commits Verisign and ICANN to cooperate and negotiate in good faith to amend the .COM Registry Agreement by the second anniversary date of the proposed Amendment in order to preserve and enhance the security of the Internet or the TLD; (3) commits Verisign and ICANN to cooperate and negotiate in good faith to amend the terms of the .COM Registry Agreement as may be necessary for consistency with changes to the Cooperative Agreement between Verisign and the U.S. Department of Commerce. All other terms and conditions of the existing Registry Agreement remain unchanged.

Which stakeholders or others were consulted?

ICANN engaged in bilateral negotiations with Verisign to agree to the terms of the proposed Amendment. The proposed Amendment was then published for public comment from 30 June 2016 to 12 August 2016. Following the public comment period, the comments were summarized and analyzed.

What concerns or issues were raised by the community?

There were 99 comment submissions from individuals and groups/organizations during the 42-day public comment period. Some commenters were generally supportive of the proposed Amendment while others raised concerns. A summary and analysis of the comments is provided below and also posted at <https://www.icann.org/en/system/files/files/report-comments-com-amendment-09sep16-en.pdf>.

What significant materials did the Board review?

As part of its deliberations, the Board reviewed various materials, including, but not limited to, the following materials and documents:

What factors has the Board found to be significant?

The Board carefully considered the public comments received for the proposed Amendment, along with the summary and analysis of those comments.

The Board acknowledges that some commenters were generally supportive of the proposed Amendment, and some expressed general support but also asked ICANN and/or Verisign to clarify the relationship of the Cooperative Agreement and proposed Amendment, particularly around pricing, and the provisions or topics that would be the subject of good faith negotiations by the second anniversary of the effective date of the proposed Amendment.

While the Board acknowledges the suggested changes to the proposed Amendment to specify what provisions will be discussed by the two-year anniversary of the proposed Amendment, the Board notes that the language as drafted in the proposed Amendment balances providing a commitment to engage in negotiations, while providing leeway to consider future topics related to preserving and enhancing the security and stability of the Internet or the TLD in this changing landscape.

With respect to revising the proposed Amendment to account for potential changes to, or cancelation of the Cooperative Agreement between Verisign and the Department of Commerce, the Board notes that the proposed Amendment already takes into account the Cooperative Agreement. The proposed Amendment includes language, requiring ICANN and Verisign to engage in good faith negotiations to make changes to the .COM Registry Agreement as may be necessary for consistency with changes to, or the termination or expiration of, the Cooperative Agreement.

The Board also acknowledges that there were several comments submitted relating to prices for .COM domain names. Some commenters suggested that the current price cap in the Registry Agreement must remain in place, while others recommended that prices must be reduced. The Board notes that Section 7.3(d) of the .COM Registry Agreement specifies the maximum price that Verisign can charge for registry services. The proposed Amendment does not change this provision.

The Board also acknowledges the comments submitted opposing the presumptive renewal right provision in the .COM Registry Agreement and suggestions that the presumptive renewal right should be taken away if certain events occur, such as an uncured material breach of the Registry Agreement. Others suggested that instead of extending the .COM Registry Agreement, it should be put out for a competitive public tender to ensure that the registrants are charged lower prices. The Board notes that the presumptive right of renewal in Section 4.2 of the .COM Registry Agreement is a provision that is in all of ICANN’s registry agreements. The provision allows a registry operator the right to renew the agreement at its expiration, provided that the registry operator is in good standing at the time of renewal as set forth under the terms of the presumptive renewal provision. This presumptive renewal provision is in place to ensure stability, security, and reliability in the operation of the TLD, i.e., to encourage long-term investment in robust TLD operations. This has served public interest by encouraging investment in the TLD registry infrastructure and improvements in reliability of the TLD operations. ICANN has previously described the rationale for presumptive renewal for registries: “Absent countervailing reasons, there is little public benefit, and some significant potential for disruption, in regular changes of a registry operator. In addition, a significant chance of losing the right to operate the registry after a short period creates adverse incentives to favor short-term gain over long-term investment. On the other hand, the community, acting through ICANN, must have the ability to replace a registry operator that is not adequately serving the community in the operation of a registry.”

The Board acknowledges the comments that the .COM Registry Agreement should be brought in line with new safeguards and intellectual property protections found in the New gTLD Registry Agreement. Some of the commenters noted that certain legacy gTLD Registry Operators have adopted the general form of the New gTLD Registry Agreement (e.g. .PRO, .CAT, .TRAVEL) including the additional enhancements and safeguards, and .COM should be required to do the same. Some suggested that not requiring .COM to be subject to the new enhancements, safeguards, and intellectual property protections in the New gTLD Registry Agreement raises concerns about whether ICANN is adhering to its core values related to non-discriminatory or preferential treatment, serving the public interest, transparency, and competition. The Board notes that the proposed Amendment posted for public comment is a simple extension of the current term of the agreement, and moving to the form of the new gTLD Registry Agreement would require longer discussion and community consultation. Proposing a simple Amendment at this time to extend the term of the .COM registry agreement is intended to maintain the stable, secure, and reliable operations of the .COM TLD.

The Board also notes that the proposed Amendment provides a provision that commits ICANN and Verisign to cooperate and negotiate in good faith to amend the .COM Registry Agreement by the second anniversary date of the proposed amendment in order to preserve and enhance the security of the Internet or the TLD. This language was negotiated to provide an opportunity for future discussions that may be needed to discuss potential changes to preserve and enhance the security of the Internet or the .COM TLD.

The Board acknowledges comments asking for confirmation that Verisign will be required to implement future developed consensus policies that may provide for additional safeguards and enhancements. The Board notes that Section 3.1 (b) of the .COM Registry Agreement states that, “At all times during the term of this Agreement and subject to the terms hereof, Registry Operator will fully comply with and implement all Consensus Policies found at http://www.icann.org/en/general/consensus-policies.htm, as of the Effective Date and as may in the future be developed and adopted in accordance with ICANN’s Bylaws and as set forth below.”

The Board acknowledges the comments that opposed the early renewal of the .COM Registry Agreement and the linkage to the Root Zone Maintainer Agreement (RZMA). These comments noted that the root zone maintainer infrastructure should never have become “inextricably intertwined” with Verisign’s .COM operations. Some questioned how linking the two agreements would enhance the security, stability and resiliency of root operations and argued that the linkage represents a single source of failure. These commenters urged ICANN technical staff to begin exploring how some practical separation between root zone and .COM technical operations might be achieved if that eventuality ever arises, and to assure that such action does not pose a threat to the security and stability of the DNS.

The Board notes that Verisign has been providing “registration services” under its Cooperative Agreement with NTIA for many years, which was broadly defined to include root zone maintainer function and .COM Top Level Domain registry services. Given the unified nature of these two functions under the Cooperative Agreement, much of the infrastructure supporting the root zone maintainer function is “intertwined” with Verisign’s TLD operations for .COM. A key component of ensuring security of the root operations was making sure that those operations continued to benefit from its historic association with the .COM operations. This was achieved by the proposed simple extension of the .COM Registry Agreement to coincide with the term of the new RZMA. While the terms of the agreements are linked together in the sense that they would expire at the same time, the agreements do not contain any provisions linking the performance of the obligations under the .COM Registry Agreement with the obligations under the RZMA. In fact, the Root Zone Maintainer Services Agreement (“RZMA”), approved by the ICANN Board on 9 August 2016, includes provisions that provide the community the ability – through a consensus-based, community-driven process – to require ICANN to transition the root zone maintainer function to another service provider three years after the effective date of the agreement.

The Board acknowledges the comments suggesting that not requiring .COM to be subject to the new enhancements, safeguards, and intellectual property protections in the New gTLD Registry Agreement raises concerns about whether ICANN is adhering to its core values related to non-discriminatory or preferential treatment, serving the public interest, transparency, and competition.

The Board notes that the Bylaws enumerate core values that should guide the decisions and actions of ICANN in performing its mission, and ICANN takes seriously its commitment to those values. As provided in the Bylaws, the “core values are deliberately expressed in very general terms, so that they may provide useful and relevant guidance in the broadest possible range of circumstances. Because they are not narrowly prescriptive, the specific way in which they apply, individually and collectively, to each new situation will necessarily depend on many factors that cannot be fully anticipated or enumerated; and because they are statements of principle rather than practice, situations will inevitably arise in which perfect fidelity to all eleven core values simultaneously is not possible. Any ICANN body making a recommendation or decision shall exercise its judgment to determine which core values are most relevant and how they apply to the specific circumstances of the case at hand, and to determine, if necessary, an appropriate and defensible balance among competing values.” When considering the comments and approval of the proposed Amendment, the Board has taken into consideration the relevant core values in order to balance the competing priorities.

The Board further acknowledges comments concerning competitive issues and providing a level playing field. Article II, Section 3 of ICANN’s Bylaws state, “ICANN shall not apply its standards, policies, procedures, or practices inequitably or single out any particular party for disparate treatment unless justified by substantial and reasonable cause, such as the promotion of effective competition.” The Board notes the .COM Registry Agreement contains many different terms that are not present in other registry agreements. These unique terms might be considered either favorable or unfavorable depending on one’s point of view. For example, the price control provision in Section 7.3 of the .COM registry agreement tightly controls the ability of the registry operator to raise prices in a manner that is not present in any other registry agreement.

Are there positive or negative community impacts?

ICANN conducted a review of Verisign’s recent performance under the current .COM Registry Agreement and found that Verisign substantially met its contractual requirements.

The Board’s approval of the proposed Amendment is intended to ensure the continued stable, secure, and reliable operations of the .COM TLD.

Are there fiscal impacts or ramifications on ICANN (strategic plan, operating plan, budget); the community; and/or the public?

There is no significant fiscal impact expected if the Board approves the proposed Amendment.

Are there any security, stability or resiliency issues relating to the DNS?

There are no expected security, stability, or resiliency issues related to the DNS if the Board approves the proposed Amendment

 

20
Sep

ICANN Board Approves .Com RA Extension

ICANN has just released the Approved Board Resolutions from its meeting of Thursday, September 15th, and one of its major actions was to approve the proposed extension of the .Com registry Agreement (RA) through November 2024. The complete text of the Resolution and the rationale for its adoption can be found at the end of this post.

Wholesale prices of .Com domains are unaffected by the RA extension and remain frozen at $7.85 through the end of November 2018 under the terms of the separate Cooperative Agreement between Verisign and the NTIA. As the Department of Justice explained in an August 31st letter to Sen. Ted Cruz, once the RA is extended the NTIA will have full leeway to extend the price freeze through 2024.

ICA had filed a public comment, in which we indicated non-opposition to the proposed extension so long as it did not affect .Com pricing or get tied to policy decisions that should not properly be injected into contract negotiations between ICANN and registries.

As stated in the Executive Summary of ICA’s comment letter:

  • ICA has no objection to the proposed .Com RA extension as it simply provides the same additional six year contract term that Verisign would be entitled to in 2018 under its contractual right of presumptive renewal. It will have the salutary effect of preventing GDD staff from attempting to impose the URS and other new gTLD RPMs on .Com during a time when an active ICANN Working Group is exploring the policy question of whether any of these RPMs should become Consensus Policy applicable to legacy gTLDs.
  • Our non-objection is based on our understanding that the contract term extension will have no impact on the pricing of .Com domains, as the current price freeze they are subject to is contained in the separate Cooperative Agreement between Verisign and the NTIA.
  • While we have no general objection to ICANN’s practice of non-interference with the pricing policies of gTLD registries, we do believe that any registry’s abuse of pricing power should weigh against its right of presumptive renewal. We therefore believe that ICANN should amend all registry contracts to make clear that, at a minimum, a registry operator subject to successful government action for violations of antitrust or competition laws should face competitive rebid of its contract. Such amendment would further discourage all gTLD registries from engaging in abusive and anticompetitive market conduct.
  • While the proposed RA extension is justified by the present intermingling of .Com and Root Zone technical operations, given that the related RZMA between ICANN and Verisign contemplates the possibility of future termination or transition, we would urge ICANN to take steps to assure that the intermingling does not continue to such an extent that would make the exercise of those options technically infeasible or contrary to the security and stability of the DNS.

As ICA anticipated, trademark interests such as the International Trademark Association (INTA) and ICANN’s Intellectual Property Constituency (IPC) opposed approval of the proposed RA extension unless Verisign committed in advance to adopt the rights protection mechanisms (RPMs) created for the new gTLD program. Some new gTLD registry operators took a similar position. The question of whether those RPMs should become applicable to legacy gTLDs like .Com is presently being considered by an ICANN working group reviewing all RPMs in all gTLDs, and it is expected to issue a draft report and recommendations in mid-2017. That GNSO-created policy review group is the proper place for such issues to be transparently studied and decided, rather than in closed door negotiations between ICANN staff and registry operators.

In explaining its decision, the Board noted that some commenters had wanted the Board to specify what additional subjects should be discussed by ICANN and Verisign in potential negotiations between now and 2018, but it refused to do so, explaining:

While the Board acknowledges the suggested changes to the proposed Amendment to specify what provisions will be discussed by the two-year anniversary of the proposed Amendment, the Board notes that the language as drafted in the proposed Amendment balances providing a commitment to engage in negotiations, while providing leeway to consider future topics related to preserving and enhancing the security and stability of the Internet or the TLD in this changing landscape.

The Board also noted the comments that had called for it to impose the new gTLD RPMs as part of this approval, and explained why it had declined to do so:

The Board acknowledges the comments that the .COM Registry Agreement should be brought in line with new safeguards and intellectual property protections found in the New gTLD Registry Agreement. Some of the commenters noted that certain legacy gTLD Registry Operators have adopted the general form of the New gTLD Registry Agreement (e.g .PRO, .CAT, .TRAVEL) including the additional enhancements and safeguards, and .COM should be required to do the same. Some suggested that not requiring .COM to be subject to the new enhancements, safeguards, and intellectual property protections in the New gTLD Registry Agreement raises concerns about whether ICANN is adhering to its core values related to non-discriminatory or preferential treatment, serving the public interest, transparency, and competition. The Board notes that the proposed Amendment posted for public comment is a simple extension of the current term of the agreement, and moving to the form of the new gTLD Registry Agreement would require longer discussion and community consultation. Proposing a simple Amendment at this time to extend the term of the .COM registry agreement is intended to maintain the stable, secure, and reliable operations of the .COM TLD.

The Board’s explanation also contains this very relevant language:

The Board acknowledges the comments suggesting that not requiring .COM to be subject to the new enhancements, safeguards, and intellectual property protections in the New gTLD Registry Agreement raises concerns about whether ICANN is adhering to its core values related to non-discriminatory or preferential treatment, serving the public interest, transparency, and competition….When considering the comments and approval of the proposed Amendment, the Board has taken into consideration the relevant core values in order to balance the competing priorities.

The Board further acknowledges comments concerning competitive issues and providing a level playing field. Article II, Section 3 of ICANN’s Bylaws state, “ICANN shall not apply its standards, policies, procedures, or practices inequitably or single out any particular party for disparate treatment unless justified by substantial and reasonable cause, such as the promotion of effective competition.” The Board notes the .COM Registry Agreement contains many different terms that are not present in other registry agreements. These unique terms might be considered either favorable or unfavorable depending on one’s point of view. For example, the price control provision in Section 7.3 of the .COM registry agreement tightly controls the ability of the registry operator to raise prices in a manner that is not present in any other registry agreement.

Summing up, ICA commends the Board for not entangling a simple extension of the .Com RA intended to assure the security and stability of the DNS with policy decisions that are being properly addressed in an ongoing ICANN working group. Although the extension commits both ICANN and Verisign to engage in such additional discussions as are necessary for consistency with any changes to, or the termination or expiration of, the Cooperative Agreement between NTIA and Verisign, any such discussions will likely take place after the RPM Review WG has rendered its consensus on whether any of the new gTLD RPMs should become Consensus Policy and, equally important, whether any of them should be modified going forward.

*****

Text of ICANN Board Resolution and Rationale—

 

.COM Registry Agreement Amendment

Whereas, ICANN and Verisign engaged in discussions on a proposed amendment to the 1 December 2012 .COM Registry Agreement (“Amendment”) and agreed to extend the term of the Agreement to 30 November 2024 to coincide with the term of the Root Zone Maintainer Services Agreement in order to enhance the security, stability and resiliency of root zone operations.

Whereas, the proposed Amendment also requires Verisign and ICANN to cooperate and negotiate in good faith to: (1) amend the .COM Registry Agreement by the second anniversary date of the proposed Amendment in order to preserve and enhance the security of the Internet or the TLD; and (2) as may be necessary for consistency with changes to the Cooperative Agreement between Verisign and the U.S. Department of Commerce. All other terms and conditions in the existing Registry Agreement remain unchanged.

Whereas, ICANN commenced a public comment period from 30 June 2016 to 12 August 2016 <https://www.icann.org/public-comments/com-amendment-2016-06-30-en> on the proposed Amendment. Ninety-nine (99) comment submissions were posted by both individuals and organizations/groups.

Whereas, the Board carefully considered the comments and the staff summary and analysis of comments.

Whereas, ICANN conducted a review of Verisign’s recent performance under the current .COM Registry Agreement and found that Verisign substantially met its contractual requirements.

Resolved (2016.09.15.09), the proposed amendment to the .COM Registry Agreement <https://www.icann.org/sites/default/files/tlds/com/com-amend-1-pdf-30jun16-en.pdf> [PDF, 100 KB] is approved, subject to the RZMA being executed, and the President and CEO, or his designee(s), is authorized to take such actions as appropriate to finalize and execute the Amendment.

Rationale for Resolution 2016.09.15.09

Why the Board is addressing the issue now?

On 1 December 2012, ICANN and Verisign, entered into a Registry Agreement under which Verisign operates the .COM top-level domain. The agreement is set to expire on 30 November 2018. ICANN and Verisign have negotiated a proposed Amendment, which was posted for a 42-day ICANN public comment period between 30 June 2016 and 12 August 2016. At this time, the Board is approving the proposed Amendment for the continued operation of .COM TLD by Verisign.

What is the proposal being considered?

The proposed Amendment: (1) extends the term of the .COM Registry Agreement to 30 November 2024 to coincide with the term of the Root Zone Maintainer Services Agreement(RZMA) between ICANN and Verisign; (2) commits Verisign and ICANN to cooperate and negotiate in good faith to amend the .COM Registry Agreement by the second anniversary date of the proposed Amendment in order to preserve and enhance the security of the Internet or theTLD; (3) commits Verisign and ICANN to cooperate and negotiate in good faith to amend the terms of the .COM Registry Agreement as may be necessary for consistency with changes to the Cooperative Agreement between Verisign and the U.S. Department of Commerce. All other terms and conditions of the existing Registry Agreement remain unchanged.

Which stakeholders or others were consulted?

ICANN engaged in bilateral negotiations with Verisign to agree to the terms of the proposed Amendment. The proposed Amendment was then published for public comment from 30 June 2016 to 12 August 2016. Following the public comment period, the comments were summarized and analyzed.

What concerns or issues were raised by the community?

There were 99 comment submissions from individuals and groups/organizations during the 42-day public comment period. Some commenters were generally supportive of the proposed Amendment while others raised concerns. A summary and analysis of the comments is provided below and also posted at <https://www.icann.org/en/system/files/files/report-comments-com-amendment-09sep16-en.pdf> [PDF, 200 KB].

What significant materials did the Board review?

As part of its deliberations, the Board reviewed various materials, including, but not limited to, the following materials and documents:

What factors has the Board found to be significant?

The Board carefully considered the public comments received for the proposed Amendment, along with the summary and analysis of those comments.

The Board acknowledges that some commenters were generally supportive of the proposed Amendment, and some expressed general support but also asked ICANN and/or Verisign to clarify the relationship of the Cooperative Agreement and proposed Amendment, particularly around pricing, and the provisions or topics that would be the subject of good faith negotiations by the second anniversary of the effective date of the proposed Amendment.

While the Board acknowledges the suggested changes to the proposed Amendment to specify what provisions will be discussed by the two-year anniversary of the proposed Amendment, the Board notes that the language as drafted in the proposed Amendment balances providing a commitment to engage in negotiations, while providing leeway to consider future topics related to preserving and enhancing the security and stability of the Internet or the TLD in this changing landscape.

With respect to revising the proposed Amendment to account for potential changes to, or cancelation of the Cooperative Agreement between Verisign and the Department of Commerce, the Board notes that the proposed Amendment already takes into account the Cooperative Agreement. The proposed Amendment includes language, requiring ICANN and Verisign to engage in good faith negotiations to make changes to the .COM Registry Agreement as may be necessary for consistency with changes to, or the termination or expiration of, the Cooperative Agreement.

The Board also acknowledges that there were several comments submitted relating to prices for .COM domain names. Some commenters suggested that the current price cap in the Registry Agreement must remain in place, while others recommended that prices must be reduced. The Board notes that Section 7.3(d) of the .COM Registry Agreement specifies the maximum price that Verisign can charge for registry services. The proposed Amendment does not change this provision.

The Board also acknowledges the comments submitted opposing the presumptive renewal right provision in the .COM Registry Agreement and suggestions that the presumptive renewal right should be taken away if certain events occur, such as an uncured material breach of the Registry Agreement. Others suggested that instead of extending the .COM Registry Agreement, it should be put out for a competitive public tender to ensure that the registrants are charged lower prices. The Board notes that the presumptive right of renewal in Section 4.2 of the .COM Registry Agreement is a provision that is in all of ICANN’s registry agreements. The provision allows a registry operator the right to renew the agreement at its expiration, provided that the registry operator is in good standing at the time of renewal as set forth under the terms of the presumptive renewal provision. This presumptive renewal provision is in place to ensure stability, security, and reliability in the operation of the TLD, i.e., to encourage long-term investment in robust TLD operations. This has served public interest by encouraging investment in the TLD registry infrastructure and improvements in reliability of the TLD operations. ICANN has previously described the rationale for presumptive renewal for registries: “Absent countervailing reasons, there is little public benefit, and some significant potential for disruption, in regular changes of a registry operator. In addition, a significant chance of losing the right to operate the registry after a short period creates adverse incentives to favor short-term gain over long-term investment. On the other hand, the community, acting through ICANN, must have the ability to replace a registry operator that is not adequately serving the community in the operation of a registry.”

The Board acknowledges the comments that the .COM Registry Agreement should be brought in line with new safeguards and intellectual property protections found in the New gTLD Registry Agreement. Some of the commenters noted that certain legacy gTLD Registry Operators have adopted the general form of the New gTLD Registry Agreement (e.g .PRO, .CAT, .TRAVEL) including the additional enhancements and safeguards, and .COM should be required to do the same. Some suggested that not requiring .COM to be subject to the new enhancements, safeguards, and intellectual property protections in the New gTLD Registry Agreement raises concerns about whether ICANN is adhering to its core values related to non-discriminatory or preferential treatment, serving the public interest, transparency, and competition. The Board notes that the proposed Amendment posted for public comment is a simple extension of the current term of the agreement, and moving to the form of the new gTLD Registry Agreement would require longer discussion and community consultation. Proposing a simple Amendment at this time to extend the term of the .COM registry agreement is intended to maintain the stable, secure, and reliable operations of the .COM TLD.

The Board also notes that the proposed Amendment provides a provision that commits ICANN and Verisign to cooperate and negotiate in good faith to amend the .COM Registry Agreement by the second anniversary date of the proposed amendment in order to preserve and enhance the security of the Internet or the TLD. This language was negotiated to provide an opportunity for future discussions that may be needed to discuss potential changes to preserve and enhance the security of the Internet or the .COM TLD.

The Board acknowledges comments asking for confirmation that Verisign will be required to implement future developed consensus policies that may provide for additional safeguards and enhancements. The Board notes that Section 3.1 (b) of the .COM Registry Agreement states that, “At all times during the term of this Agreement and subject to the terms hereof, Registry Operator will fully comply with and implement all Consensus Policies found athttp://www.icann.org/en/general/consensus-policies.htm, as of the Effective Date and as may in the future be developed and adopted in accordance with ICANN’s Bylaws and as set forth below.”

The Board acknowledges the comments that opposed the early renewal of the .COM Registry Agreement and the linkage to the Root Zone Maintainer Agreement (RZMA). These comments noted that the root zone maintainer infrastructure should never have become “inextricably intertwined” with Verisign’s .COM operations. Some questioned how linking the two agreements would enhance the security, stability and resiliency of root operations and argued that the linkage represents a single source of failure. These commenters urged ICANN technical staff to begin exploring how some practical separation between root zone and .COM technical operations might be achieved if that eventuality ever arises, and to assure that such action does not pose a threat to the security and stability of the DNS.

The Board notes that Verisign has been providing “registration services” under its Cooperative Agreement with NTIA for many years, which was broadly defined to include root zone maintainer function and .COM Top Level Domain registry services. Given the unified nature of these two functions under the Cooperative Agreement, much of the infrastructure supporting the root zone maintainer function is “intertwined” with Verisign’s TLD operations for .COM. A key component of ensuring security of the root operations was making sure that those operations continued to benefit from its historic association with the .COM operations. This was achieved by the proposed simple extension of the .COM Registry Agreement to coincide with the term of the new RZMA. While the terms of the agreements are linked together in the sense that they would expire at the same time, the agreements do not contain any provisions linking the performance of the obligations under the .COM Registry Agreement with the obligations under the RZMA. In fact, the Root Zone Maintainer Services Agreement (“RZMA”), approved by theICANN Board on 9 August 2016, includes provisions that provide the community the ability – through a consensus-based, community-driven process – to require ICANN to transition the root zone maintainer function to another service provider three years after the effective date of the agreement.

The Board acknowledges the comments suggesting that not requiring .COM to be subject to the new enhancements, safeguards, and intellectual property protections in the New gTLD Registry Agreement raises concerns about whether ICANN is adhering to its core values related to non-discriminatory or preferential treatment, serving the public interest, transparency, and competition.

The Board notes that the Bylaws enumerate core values that should guide the decisions and actions of ICANN in performing its mission, and ICANN takes seriously its commitment to those values. As provided in the Bylaws, the “core values are deliberately expressed in very general terms, so that they may provide useful and relevant guidance in the broadest possible range of circumstances. Because they are not narrowly prescriptive, the specific way in which they apply, individually and collectively, to each new situation will necessarily depend on many factors that cannot be fully anticipated or enumerated; and because they are statements of principle rather than practice, situations will inevitably arise in which perfect fidelity to all eleven core values simultaneously is not possible. Any ICANN body making a recommendation or decision shall exercise its judgment to determine which core values are most relevant and how they apply to the specific circumstances of the case at hand, and to determine, if necessary, an appropriate and defensible balance among competing values.” When considering the comments and approval of the proposed Amendment, the Board has taken into consideration the relevant core values in order to balance the competing priorities.

The Board further acknowledges comments concerning competitive issues and providing a level playing field. Article II, Section 3 of ICANN’s Bylaws state, “ICANN shall not apply its standards, policies, procedures, or practices inequitably or single out any particular party for disparate treatment unless justified by substantial and reasonable cause, such as the promotion of effective competition.” The Board notes the .COM Registry Agreement contains many different terms that are not present in other registry agreements. These unique terms might be considered either favorable or unfavorable depending on one’s point of view. For example, the price control provision in Section 7.3 of the .COM registry agreement tightly controls the ability of the registry operator to raise prices in a manner that is not present in any other registry agreement.

Are there positive or negative community impacts?

ICANN conducted a review of Verisign’s recent performance under the current .COM Registry Agreement and found that Verisign substantially met its contractual requirements.

The Board’s approval of the proposed Amendment is intended to ensure the continued stable, secure, and reliable operations of the .COM TLD.

Are there fiscal impacts or ramifications on ICANN (strategic plan, operating plan, budget); the community; and/or the public?

There is no significant fiscal impact expected if the Board approves the proposed Amendment.

Are there any security, stability or resiliency issues relating to the DNS?

There are no expected security, stability, or resiliency issues related to the DNS if the Board approves the proposed Amendment

 

 

13
Sep

.Com RA Extension on ICANN Board’s 9/15 Agenda

 

The “.COM Registry Agreement Amendment” is on the Main Agenda for this Thursday’s Regular Meeting of the ICANN Board.

The proposed extension of the RA was announced and put out for public comment on June 30th. The public comment period closed on August 12th and ICANN staff’s Report of Public Comments was due on September 15th, coincident with the Board meeting. The original due date for that staff Report was August 26th, but was pushed back to accommodate the large number of comments and the divergent views they expressed. ICANN staff, however, beat the September 15th deadline and filed their Report on September 10th.

The .Com RA is designed to synchronize the start and end dates of that Agreement with the new Root Zone Management Agreement (RZMA) that will be entered into by CANN and Verisign and take effect on the day of the IANA transition, currently scheduled for October 1st. If the transition is delayed by Washington political maneuvering that will of course affect the start dates for both the extended .Com RA and the RZMA.

In its announcement of the proposed extension, ICANN explained:

Verisign has been providing “registration services” under its Cooperative Agreement with NTIA, which was broadly defined to include root zone management functions and Top Level Domain registry services. Given the unified nature of the present Cooperative Agreement, much of the root zone infrastructure itself is inextricably intertwined with Verisign’s TLD operations for .com as discussed in greater detail in the blog.

The extension of the term of the .com registry agreement is intended to maintain stable, secure, and reliable operations of the root zone not only for direct root zone management service customers (Registry Operators, Registrars and Root Server Operators), but also to maintain the security and stability of the Internet’s domain name system.

The referenced blog post was penned by Global Domains Division (GDD) head Akram Atallah and further explained:

Given the unified nature of the present Cooperative Agreement, much of the root zone infrastructure itself is “inextricably intertwined” with Verisign’s TLD operations for .com: the servers that provide root services are hosted at every .com resolution site (over 100 locations). These servers share bandwidth, routing and monitoring with the .com operations, and the servers use the same code base as the .com TLD name servers and are operated and maintained by the same operation and engineering group. On the provisioning side, the root zone’s provisioning system is derived from the .com Shared Registration System (SRS), using the structure, schema, and software used for .com provisioning operations. Verisign builds and signs the root zone today using the same cryptographic facilities used for .com as well as signing software derived from that used for signing .com. Importantly, Verisign’s root zone operations are also within the .com’s Denial of Service attack detection and mitigation framework including independent internal and external monitoring and packet filtering at all layers. A key component of ensuring security of the root operations was making sure that those operations continued to benefit from its historic association with the .com operations.

As noted, the volume of public comments was heavy and the views contradictory.

A great many comments were generated by domain registrants under the wholly mistaken impression that the RA extension would somehow lift the current wholesale price freeze on .Com and allow Verisign to immediately double prices or more (a move that would likely attract the immediate attention of the Department of Justice’s Antitrust Division as well as the Federal Trade Commission for possible abuse of market power). But those comments were based on a false premise, as the .Com price freeze is contained in an entirely separate document, the Cooperative Agreement between Verisign and the National Telecommunications and Information Administration (NTIA). That agreement runs through the end of November 2018 and, as the Department of Justice recently explained in a letter to Sen. Ted Cruz:

As you may know, Verisign may not extend the .com Registry Agreement without obtaining NTIA’s prior written approval. Amendment 30 of the Cooperative Agreement requires such prior approval and provides the standard for NTIA’s review. In pertinent part, Amendment 30 provides: “[t]he Department [of Commerce] shall provide such written approval if it concludes that approval will serve the public interest in (a) the continued security and stability of the Internet domain name system and the operation of the .com registry … , and (b) the provision of Registry Services … offered at reasonable prices, terms, and conditions.” We note that the current extension proposal contemplated by ICANN and Verisign does not change the price cap contained in the 2012 .com Registry Agreement, which will remain in effect through November 30, 2018. Nor does the current extension proposal alter the price cap in Amendment 32 of the Cooperative Agreement. Moreover, if NTIA were to approve an extension of the .com Registry Agreement, it would have the right in its sole discretion to extend the term of the Cooperative Agreement with the current price cap in place until 2024 at any time prior to November 30, 2018, the date on which the Cooperative Agreement is currently scheduled to expire. If this occurs, the $7.85 fee cap would be extended another six years to 2024. (Emphasis added)

The Internet Commerce Association ICA), which represents professional domain investors, took a stance of non-opposition to the proposed RA extension. For one thing, the RA is virtually certain to be extended to 2024 when it comes up for renewal in 2018 under the terms of its presumptive renewal clause, so there’s no real harm in effecting that extension two years earlier.

And for domainers there is a net benefit, as an extension – as opposed to a renewal – would deny any negotiating leverage to GDD staff who have shown a propensity to illicitly inject themselves into the policy process by pushing for the general acceptance of certain contract revisions as legacy gTLD agreements come up for renewal, and specifically for the new gTLD Rights Protection Mechanism (RPM) of Uniform Rapid Suspension (URS), that are not Consensus Policy.

There is currently a GNSO Council-authorized working group, which I Co-Chair, that is specifically tasked under its Charter to review the efficacy of the new gTLD RPMs, recommend any adjustments, and only then consider the question of whether they should become Consensus Policy and thereby be applicable to legacy gTLDs like .Com. That standard GNSO Policy Development Process (PDP) is the proper and established route for deciding the applicability of the new RPMs to legacy gTLDs, which is clearly identified as a policy decision .

Specifically, ICA stated on this point:

“Further, changing the end date of the .Com RA through an extension now rather than a renewal in two years will have the salutary effect of depriving ICANN Global Domain Division (GDD) staff of any opportunity to seek the imposition of Uniform Rapid Suspension (URS) or any other new gTLD Rights protection Mechanisms (RPMs) through contractual imposition as they did in 2105 in regard to the RAs for .Cat, .Pro, and .Travel. While the Board later stated, in approving the amended RAs, that “the Board’s approval of the Renewal Registry Agreement is not a move to make the URS mandatory for any legacy TLDs, and it would be inappropriate to do so”, we have no assurance that GDD staff does not still hold its previously stated position that, “With a view to increase the consistency of registry agreements across all gTLDs, ICANN has proposed that the renewal agreement be based on the approved new gTLD Registry Agreement as updated on 9 January 2014.” Further, notwithstanding Reconsideration Requests filed with the Board Governance Committee (BGC) by ICA, the Business Constituency (BC), and the Non-Commercial Users Constituency (NCUC), the BGC let the imposition of URS by ICANN staff via contract renegotiation stand.

Extending the .Com RA through 2024 through the proposed extension, rather than via a negotiated renewal, will preserve the question of whether the URS and other new gTLD RPMs should become Consensus Policies applicable to legacy gTLDs for decision by the Working Group established to review all RPMs at all gTLDs – which is precisely where this key policy question should be fully and objectively considered and decided by the ICANN community.” (Emphasis in original)

ICA’s comment letter also suggested that the presumptive renewal clauses of all gTLDs should be reviewed and revised to constrain potential future pricing abuses, stating:

While we have no general objection to ICANN’s practice of non-interference with the pricing policies of gTLD registries, we do believe that any registry’s abuse of pricing power should weigh against its right of presumptive renewal. We therefore believe that ICANN should amend all registry contracts to make clear that, at a minimum, a registry operator subject to successful government action for violations of antitrust or competition laws should face competitive rebid of its contract. Such amendment would further discourage all gTLD registries from engaging in abusive and anticompetitive market conduct.

Trademark interests, for their part, saw the proposed extension as a means of bypassing the bottom-up, multistakeholder consensus policy process and imposing the new RPMs by ICANN staff fiat. The comments of the International Trademark Association (INTA) opposed the extension on these grounds:

INTA was hopeful that ICANN and Verisign would fill this gap and level the playing field by bilaterally negotiating the inclusion of the Relevant Terms when the .COM Registry Agreement was to be renewed in 2018.5 Yet in the proposed amendment to the .COM Registry Agreement that is the subject of the current public comment period, ICANN has proposed to mechanically extend that agreement until 2024, without any effort to update Verisign’s terms at all. Instead, the proposed amendment merely requires ICANN and Verisign to cooperate and negotiate in good faith sometime in the next two years to amend the agreement to preserve and enhance the security and stability of the Internet and of the .COM gTLD. That is not enough. ICANN should acknowledge that the Relevant Terms are essential to preserve and enhance the security and stability of the Internet and of the .COM gTLD, such that the requirement that ICANN and Verisign negotiate in good faith to add further amendments within a two-year time period includes a requirement to implement the Relevant Terms at that time. Given the importance of the Relevant Terms, that requirement should be explicit – not implicit.

The comments of ICANN’s Intellectual Property Constituency (IPC) took the same tack:

The proposed 6-year extension should be accompanied by steps to promptly bring the .com registry agreement into closer harmonization with ICANN’s other registry agreements, including those entered into with new gTLDs and many legacy gTLDs since 2013 in accordance with the multi-stakeholder process in furtherance of ICANN’s mission… IPC urges ICANN and Verisign to publicly commit to making these changes within the next two years as part of the “future amendments” provision of the .com registry agreement extension.

Sadly, neither the INTA nor IPC comments even notes the existence of the Working Group to Review all RPMs in all gTLDs, even though both entities and many of their members are actively participating in it (indeed, INTA’s immediate Past President is another of the WG’s Co-Chairs). In 2015, when GDD staff successfully pushed for the incorporation of the URS in the renewal agreements for the legacy registries of .Cat, .Travel and .Pro, both organizations justified that result on the thin grounds that the registries’ acquiescence was “voluntary”. Now even that fictional fig leaf has been abandoned, with both organizations now on record that the .Com extension should be approved only if Verisign involuntarily commits now to take that step within the next two years – regardless of the recommendations of the WG regarding the adoption of the new RPMs as Consensus Policy.

ICANN’s Business Constituency (BC), for its part, also favored application of the new RPMs to .Com, but recognized that this must be accomplished via proper policy channels. The BC comment stated:

The BC believes that .COM should embrace the standardized new gTLD registry agreement at this time, instead of deferring that decision until 2024 when the proposed agreement will expire; or earlier than 2024, if any or all of these aspects of the standard new gTLD registry contract should become Consensus Policy as a result of WG recommendations that are subsequently adopted by ICANN’s Board. The BC acknowledges that there is an open legal question whether any of these aspects can be enforced against .Com registrants unless they become Consensus Policies or are adopted through a further amendment of the .COM registry agreement made subsequent to the one we are addressing in this comment letter. (Note: ICA is a BC member and the author contributed to, but was not the lead drafter of, the BC comment)

New gTLD competitors of .Com also used the comment window as an opportunity to inject that market rivalry into the policy process. Portfolio new gTLD operator Donuts stated:

Donuts is opposed to the extension of ICANN’s agreement with Verisign in its proposed form. By simply renewing the .COM agreement under its current terms, ICANN and Verisign will have missed a significant opportunity to fulfill ICANN’s self-defined mandate to increase competition in the DNS marketplace and preserve the security, stability and resiliency of the DNS by bringing provisions of the .COM agreement more in harmony with the contracts governing new gTLDs and many other legacy gTLDs that recently have been renewed.

Likewise, new gTLD .XYZ took a similar position, adding to it the claim that it could reduce .Com wholesale pricing by more than eighty percent yet still operate the most important gTLD in  a fully reliable, stable, and secure manner:

XYZ is firmly opposed to this early extension. ICANN should not passively go along with Verisign’s selfish goal of extending its unfair monopoly over the internet’s most popular top-level domain name. Instead, ICANN should act in the spirit of its Bylaws and work with the NTIA and United State Department of Commerce to put the rights to operate the .COM top-level domain to a competitive public auction among capable internet registry operators for the benefit of the public… Currently, Verisign is able to charge $7.85 per annual registration of .com domain names.  However, this price is grossly out of line with the actual cost per registration to a registry operator for each incremental registration. If the right to operate .COM were put to a competitive public tender, the market would show that the .COM registration fees to registrars could be below $2.00 per registration. In fact, if XYZ <https://xyz.xyz/> were allowed to take part in such a competitive public tender, XYZ would be prepared to offer registration fees to registrars in the range of $1.00 per registration.  This is in line with the market rate for registry services, which XYZ is very familiar with. XYZ would not only be able to operate .COM charging only $1.00 per registration, but it would be able to do so with a healthy, but reasonable, profit margin and with no impact on the operational stability, reliability, security, and global interoperability of the internet.

The .Com price freeze was imposed by the NTIA in 2012 following a full competition review by DOJ’s Antitrust Division, making it difficult to conceive that government regulators would have allowed a wholesale price at least four times greater than what was required for sound registry operation. (In 2012 ICA urged NTIA to lower .Com wholesale prices to the then lower level in place for .Net, and then index future price increases to the CPI, but NTIA declined to go that far.)

As for putting the RA out for competitive rebid, NTIA approved the then controversial presumptive renewal clause of the .Com RA ten years ago, in 2006, and since then essentially identical language has been incorporated into the standard new gTLD registry agreement. Absent a material and subsequently uncured breach of its registry agreement, both Verisign and every new gTLD operator would have grounds to immediately sue ICANN if it attempted to open their RAs to competitive rebid – and that situation will stand until either the Registry Stakeholder Group volunteers to rewrite that clause (a doubtful proposition), or antitrust regulators find the near-guarantee of perpetual renewal to undermine market competition.

Summing up, if the technical intertwining of the operation of the .Com registry and the management of the root zone functions justify aligning their contractual start and renewal dates then the ICANN Board should approve the RA extension on those merits alone and leave other issues to be settled in their proper forums.

That means that:

  • The imposition of new gTLD RPMs on legacy gTLDs should await the recommendations of the GNSO WG that is currently charged with addressing that issue – a major policy issue that should not be settled by GDD staff via contract negotiations.
  • .Com wholesale pricing should be reviewed by NTIA in consultation with the DOJ as the renewal date for the Cooperative Agreement approaches in November 2018.
  • Competition between .Com and “not com” new gTLDs should take place in the marketplace, where new gTLDs have already achieved millions of collective registrations.
  • Any adjustments of the presumptive renewal clauses in all gTLD agreements, including changes that address anticompetitive pricing behavior, should be addressed by ICANN through an open and transparent process that considers all relevant interests and objectives, and is not just a closed door negotiation between ICANN and registries.

 

 

 

 

 

1
Feb

Final RPM Report Follows ICA Comment and Sets Stage for UDRP Review

Domain registrants have long voiced their desire for a comprehensive review and subsequent reforms of the Uniform Dispute Resolution Policy (UDRP). That goal is now in sight, and is set to proceed in the manner recommended to ICANN by ICA.

On January 11, 2016 ICANN policy staff submitted to the GNSO Council the “Final Issue Report on a Policy Development Process to Review All Rights Protection Mechanisms in All Generic Top-Level Domains”. That Final Report is culmination of a public comment process that started last October, in which ICA actively participated, considering how a review of the rights protection mechanisms (RPMs) for the new gTLD program should be related to an unprecedented review of the UDRP, the only ICANN Consensus Policy that has never been subjected to scrutiny since its creation. Domain registrants desiring a balanced approach to their rights versus those of trademark owners have a big stake in both reviews. RPMs should recognize and protect the rights of both domains and trademarks.

In its December 1st comment letter, ICA stated its preference for a sequential review process:

ICA prefers a separate and sequential approach for the reviews and subsequent reports and recommendations, with the RPM review preceding and thereby informing the UDRP review.

ICA further explained its practical and policy reasons for that preferred two-part approach:

Both domain registrants and trademark owner complainants deserve, after nearly two decades of unexamined use, a UDRP review and reform process that is accorded adequate time for comprehensive review and development of subsequent recommendations. This review of necessity must be preceded by the RPM review, as it was the intent of the GNSO Council in 2011 that the UDRP review be informed by that of the RPMs and by any changes made to them….We fully expect that there will be substantial interest in completing the RPM review prior to the opening of any second round of new gTLDs, and that consideration provides another reason for structural separation. If the RPM and UDRP reviews were addressed together, substantial pressure could arise to truncate the UDRP portion lest it delay the timing and adoption of final RPM recommendations. As a result this first-ever UDRP review could get short shrift and inadequate attention.

That ICA suggestion was essentially adopted by ICANN staff. In this regard, the Final Report suggests the following procedure:

Following review of community feedback received regarding the three options for a RPM review that were presented in the Preliminary Issue Report for public comment, ICANN staff recommends that the GNSO Council launch a PDP in accordance with what was presented as the third option in the Preliminary Issue Report: namely, to conduct a policy review of all the RPMs in two phases. The initial phase would focus on a review only of the RPMs developed for the New gTLD Program, and the second phase would focus on a review of the UDRP. The second phase may also include any issues identified during the first phase of the PDP that are more appropriately considered during the second phase. Cumulatively, the results of both phases of the PDP would be a full review of all RPMs developed to date for all gTLDs….Staff recommends that the work in the initial phase of the RPM PDP be performed by a standalone PDP Working Group that liaises with the recently launched PDP Working Group on New gTLD Subsequent Procedures as there may be overlapping issues arising during the work of both groups that would warrant careful coordination. Staff does not recommend folding in a review of the RPMs that were developed for the New gTLD Program into the scope of work for the New gTLD Subsequent Procedures PDP due to the likely complexity and size of that PDP….Staff also recommends that, upon completion of Phase One, the PDP Working Group submits a First Initial Report to the GNSO Council that is also published for public comment….The second, subsequent phase of work in the RPM PDP would be a review of the UDRP, ideally carried out by the same PDP Working Group….Staff believes that a benefit of this two-phased approach is a better alignment of the timing of the work on reviewing the New gTLD Program RPMs with the operational reviews of the New gTLD Program17 (including the CCT Review) and the PDP on New gTLD Subsequent Procedures. (Emphasis added)

The GNSO Council has already proceeded in harmony with that suggested approach. During its meeting of January 21st, Council adopted a Charter for The New gTLD Subsequent Procedures PDP Working Group that specifically prohibits it from addressing the RPMs, stating:

Second-Level Rights Protection Mechanisms: Proposing recommendations directly related to RPMs is beyond the remit of this PDP. There is an anticipated PDP on the “current state of all rights protection mechanisms (RPMs) implemented for both existing and new gTLDs, including but not limited to the UDRP and the URS…”. Duplication or conflicting work between the New gTLD Subsequent Procedures PDP and the PDP on RPMs must be avoided. If topics related to RPMs are uncovered and discussed in the deliberations of this PDP, those topics should be relayed to the PDP on RPMs for resolution. To assure effective coordination between the two groups, a community liaison, who is a member of both Groups, is to be appointed jointly by both Groups and confirmed by the GNSO Council. (Emphasis added)

That means that review of all the new gTLD RPMs—the Trademark Clearinghouse (TMCH) and related Sunrise and Trademark Claims service periods; Uniform Rapid Suspension System (URS); and Post-Delegation Dispute Resolution Procedures (PDDRPs) — should be the sole preserve of a new Working Group (WG) on all RPMs in all gTLDs. Following that review, it will proceed to review the UDRP and consider whether it should be reformed.

The GNSO Council will likely take up a Motion to establish that RPM WG, as well as adopt its Charter, at its next meeting scheduled to take place on February 18th.

Once Council takes that next step, ICA intends to fully engage in the review of the new gTLD RPMs and, of course, the UDRP review. ICA will advocate an approach that, while fully respecting the legitimate rights of trademark owners, brings greater balance to the exercise of all the RPMs and that helps to make the application of the UDRP a more consistent and predictable process in the future. We will of course keep our members comprehensively informed as the reviews proceed, and will solicit their feedback and guidance as critical questions emerge.

 

 

14
Dec

Initial Statement of the Internet Commerce Association Regarding the Camilla.Com UDRP Decision

Washington, DC; December 11, 2015 —

The Internet Commerce Association today released the following initial statement in regard to the November 30 decision of the WIPO Administrative Panel in the case of Camilla Australia Pty Ltd v. Domain Admin, Mrs Jello, LLC (Case No. D2015-1593; http://www.wipo.int/amc/en/domains/search/text.jsp?case=D2015-1593):

The egregious three-member panel decision in this Uniform Domain-Name Dispute-Resolution Policy (UDRP) dispute departs substantially from prevailing UDRP practice and relies on criteria inconsistent with those set forth in the UDRP as adopted by ICANN.  This decision demonstrates once again that review and reform of the UDRP by ICANN is an urgent priority.

“The panelists on the Camilla.com dispute disregarded 15 years of UDRP practice, rewrote and distorted the Policy, and set an impossible standard for domain registrants to meet to avoid the loss of their valuable generic domains” said ICA Board member Nat Cohen, President of Telepathy Inc.  “If this decision stands and guides panelists in other future cases, it would undermine the rights of millions of domain owners, undercut much of the domain industry, and would encourage further abuse of the UDRP system”, added Cohen.

The decision states that “the Panel accepts that the Respondent did not and could not reasonably have known of the Complainant’s trademark when it registered the disputed domain name in May 2009”. Based on prevailing and proper UDRP practice, that should have ended the analysis; the Respondent clearly could not have had bad faith intent when it registered the domain. Indeed, in ICA’s view, at that point the Panel would have had clear grounds to cite the Complainant for attempted reverse domain name hijacking. Complainant received its Australian trademark more than two years after the U.S.-based Respondent registered the domain, and only has a pending “intent to use” application for a U.S. trademark.

Instead, the panelists created new and unprecedented duties for registrants, proclaiming that a “registrant of domain names that adopts a PPC revenue model must ensure that after registration the disputed domain name is not used in a deceptive or confusing manner with new or developing trademarks” and a “registrant of domain names from the moment of acquisition must be prepared to take necessary steps to ensure that the PPC links generated by algorithm do not infringe existing trademarks, or any trademarks that may emerge in future”. (Emphasis added.) The panel’s decision would place a burden on domain registrants of generic words to monitor ongoing trademark registrations in every nation in the world. It would also require them to influence the proprietary ad placement algorithms of Yahoo!, Google, and other major online ad providers. Both of these new responsibilities are nowhere to be found in the UDRP rules and are impossible to meet.

The Camilla decision overthrows an important balance between trademark and domain registrant rights and provides a blueprint for any future trademark registrant to steal valuable generic domains without paying market value by simply initiating a UDRP action.

“While ICA respects trademark rights, the UDRP cannot be allowed to become a vehicle for legitimizing domain theft,” said Cohen.

The decision of whether to appeal this UDRP decision lies with the registrant. ICA believes that this decision should be overturned under the U.S. Anticybersquatting Consumer Protection Act (ACPA). If an appeal is filed, ICA will give full consideration to providing support to help persuade the court that the panel’s finding of bad faith registration and use is contrary to U.S. law.

ICA and its Counsel and legal advisory group are continuing to review the decision and may issue a further statement once that review is completed.

1
Dec

ICA Tells ICANN That Comprehensive UDRP Review Should Follow RPM Analysis

On November 30th ICA filed its comment letter regarding the “Preliminary Issue Report on a GNSO Policy Development Process to Review All Rights Protection Mechanisms in All gTLDs” that was published for public comment on October 9, 2015. ICA’s complete comment can be viewed at http://forum.icann.org/lists/comments-rpm-prelim-issue-09oct15/msg00021.html, and all 24 filed comments are available at http://forum.icann.org/lists/comments-rpm-prelim-issue-09oct15/index.html.

The principal question raised by the Report was whether the review and possible adjustment of new gTLD RPMs and the review and potential reform of the UDRP should be combined or separated. On that key decision, our comment letter said that the RPMs should be addressed prior to the UDRP review for these reasons:

We believe that the RPM review and the UDRP review each constitutes a highly complex array of interrelated questions and judgments, and that trying to combine the two into a single mega-review will tax any Working Group (WG) inordinately.

In particular, the UDRP review will constitute the first comprehensive inquiry into ICANN’s oldest Consensus Policy. It may address structural issues; such as whether ICANN should enter into uniform contractual agreements with all UDRP providers, whether there should be clear boundaries to prevent individual dispute providers’ Supplementary Rules from influencing decisional outcomes, and whether an internal appeals procedure should provide an avenue for a ‘UDRP Supreme Court’ to address and reconcile disparate decisions by different providers on nearly identical fact patterns.

…Both domain registrants and trademark owner complainants deserve, after nearly two decades of unexamined use, a UDRP review and reform process that is accorded adequate time for comprehensive review and development of subsequent recommendations. This review of necessity must be preceded by the RPM review, as it was the intent of the GNSO Council in 2011 that the UDRP review be informed by that of the RPMs and by any changes made to them. Further, as staff notes at page 8 of the Report, one result of “this approach is the fact that community consideration of the more general overarching issue concerning the comprehensiveness of all the RPMs as a set of aggregate protections for trademark holders in all gTLDs, as well as the issue of whether any of the new RPMs should be considered Consensus Policies like the UDRP, will necessarily be postponed to the second phase of work”. Unlike staff, we do not view that consideration as a drawback but as a far more responsible approach than considering integration of any of the new gTLD RPMs in legacy gTLD without knowing whether or in what manner they may be altered.

We agree with staff that “One benefit of this two-pronged approach is better alignment of the timing of the work on reviewing the new RPMs with the operational reviews of the New gTLD Program (including the CCT Review) and, conceivably, a new PDP on New gTLD Subsequent Procedures”. We fully expect that there will be substantial interest in completing the RPM review prior to the opening of any second round of new gTLDs, and that consideration provides another reason for structural separation. If the RPM and UDRP reviews were addressed together, substantial pressure could arise to truncate the UDRP portion lest it delay the timing and adoption of final RPM recommendations. As a result this first-ever UDRP review could get short shrift and inadequate attention.

Many of the other groups and individuals who filed comments also took the view that the RPM and UDRP reviews should be separate, with the RPMs teed up first.

What did surprise us was the reluctance of the trademark community to even contemplate a review of the UDRP, much less consider any changes based on nearly twenty years of experience with it.

The International Trademark Association (INTA) asserted that it is “is strongly opposed to opening the Uniform Dispute Resolution Policy (UDRP) to review as the UDRP has been functioning efficiently and well for over fifteen years. It is important to maintain this effective mechanism which combats the most blatant instances of cybersquatting within the domain name system. Any review or subsequent modifications could jeopardize the benefits that the UDRP is intended to provide to trademark owners.” Having attended INTA conferences along with thousands of others, and seen the money invested in global branding as well as the sector’s political influence, it strains credulity to believe that trademark owners could be “rolled’ in the course of a UDRP review.

ICANN’s Intellectual Property Constituency (IPC) warned “that the complexity of any review would be immense and the drain on resources considerable, with a risk of creating new problems via an overly complicated review process… the IPC has a serious concern that if a review were to be carried out, there is a risk of a polarization of views into two camps – each with a fear that the other camp would either dilute or overly strengthen the UDRP. Improvements sought by one side would be seen as potentially abusive to registrants, improvements sought by the other as potentially diluting the effectiveness of a mechanism for resolving disputes efficiently… if a review of the UDRP as a policy is to be considered, an “Expert Group” should be assembled to carry out this review.” For ICA’s part, we think that, just like war is too important to just be left to the generals, UDRP review and reform is too important to just be left to “experts” and must include participation by those with broader views of the UDRP’s impact on domain registrants and free expression, among other key considerations.

And UN agency and accredited UDRP provider the World Intellectual Property Organization (WIPO) opined that “the UDRP continues to function as intended. In its harmonized criteria and universal application, this anti-cybersquatting mechanism has come to be recognized as an international policy success… Destabilization of the predictable UDRP framework may have a range of unintended consequences. It would disrupt the body of precedent carefully developed by hundreds of panelists from across jurisdictions in tens of thousands of cases… Each day, the UDRP demonstrates the flexibility to meet the demands of an evolving DNS; it does not need system-wide updates that would imprudently limit this flexibility”. To the contrary, domain investors would respond that this “flexibility” is code for a lack of any binding precedent that makes the UDRP more of a casino game in a world of proliferating UDRP providers.

We are pleased that ICANN’s Business Constituency, of which ICA is a member, took a more balanced approach, stating, “While the BC believes that the UDRP is working well overall, it now seems timely to engage in a review of its performance with an eye toward considering possible improvements, so long as that UDRP review commences after completion of the RPM review.”

In response to the trademark community’s message of opposition and excessive caution, ICA added this final point to our comment’s Executive Summary, to wit:

Finally, we have strong disagreement with the view expressed by a minority of commenters that the UDRP review anticipated by the GNSO Council’s Resolution of December 15, 2011 should not proceed at all, and that any such undertaking would be unduly arduous and dangerous. The UDRP is the only ICANN Consensus Policy that has never been reviewed. Like any human undertaking, it is not perfect and was drafted by individuals who could not have known how it would be implemented in practice. Any UDRP review should of course be fully informed by the actual record of UDRP practice and experience of participants, and should proceed carefully. But we are confident that a good faith UDRP review that considers the legitimate rights and interests of both registrants and complainants, as well as related public policy issues, can produce a more balanced and consistent system that preserves the fundamental virtues of the UDRP while yielding modifications that benefit all affected parties.

ICA looks forward to participating in both the RPM and UDRP reviews. ICANN staff is scheduled to deliver a Report summarizing comments and suggesting next steps by December 10th. Following receipt of that report, the GNSO Council will decide on a way forward and, if ICA’s and other commenters’ proposed procedure is followed, will consider a draft Charter for an RPM review working group in the initial months of 2016.

Throughout the coming review processes, ICA will be an active participant seeking to protect the legitimate rights and interests of domain investors and developers and to bring greater balance between trademark and domain rights.

Here’s the rest of our comment letter’s Executive Summary:

Executive Summary

  • ICA prefers a separate and sequential approach for the reviews and subsequent reports and recommendations, with the RPM review preceding and thereby informing the UDRP review.
  • ICA reiterates all of the points made and views expressed in our prior RPM comment letter of April 30, 2015.
  • ICA believes that the URS has been largely effective in achieving its intended goals. We would strongly oppose any alterations that could make it a substitute for, rather than a narrow supplement to, the UDRP. In addition, the initiation of a PDP to determine whether the URS and other new gTLD RPMs should become Consensus Policies for all gTLDs, and the full consideration of the multiple transitional issues accompanying any such decision, illustrates again that the decision of GDD staff to seek imposition of the URS in contract renewal negotiations with legacy gTLDs was a direct and impermissible intrusion into the policy realm reserved to GNSO Council by ICANN’s Bylaws. ICANN’s Board should therefore instruct GDD staff to cease and desist from any such attempts during the time that these PDPs are open and active, and should refuse to approve any legacy gTLD renewal contract that contains any provision of new gTLD RPMs.
  • The language of Trademark Claims notices may deter legitimate noninfringing domain registrations at new gTLDs. This situation can be partly but not completely addressed by providing more comprehensive information in the notice to the prospective registrant, and also clarifying under what circumstances the post-notice registration of a domain will be considered to constitute “bad faith” for UDRP and URS purposes.
  • Labels that generate a Trademark Claims notice should not be expanded beyond the present system of exact matches of the trademark, plus domain labels recovered in UDRP or court actions under the ‘Trademark-plus-fifty’ implementation measure.
  • The right of first refusal for a premium domain name during or after the sunrise period should be conditioned on whether the trademark is unique or a dictionary word, and if a dictionary word whether the gTLD label is related to the goods and services for which it is registered.
  • Our responses to the report’s UDRP questions emphasize the need for a mechanism, perhaps via an optional internal appeal, to establish greater predictability and consistency in decisions dealing with similar facts; better protection for free speech, especially legitimate noncommercial criticism; more equitable time periods for respondents to choose counsel and draft answers; a fairer means of allocating cases among UDRP providers and their panelists; and establishment of a uniform laches policy barring complaints in defined circumstances.
  • Our additional comments on the UDRP address the need for clear guidelines and meaningful penalties to determine and deter attempted Reverse Domain Name Hijacking; greater transparency requirements for UDRP providers; and establishment of an ICANN-maintained centralized database of UDRP decisions and other relevant information.

 

20
Jul

Majority Comments say “No URS by Contract at .Cat & .Pro” – While Staff Report on .Travel Comments is Two Weeks Past Due

Once again, as it was with .Travel, the vast majority of comments on the proposed renewal Registry Agreements (RAs) for the legacy .Cat and .Pro gTLDs are united in their opposition to imposition of Uniform Rapid Suspension (URS) and other new gTLD rights protection mechanisms (RPMs) by contract, arguing that this is a consensus policy decision that can only be fairly made through the policy development process (PDP).

Comments following this general line of reasoning were filed on .Cat by, among others, the Electronic Frontier Foundation, IP Justice, ICANN’s Business Constituency (BC) and Non-Commercial Stakeholders Group (NCSG) — and of course the ICA along with individual comments filed by ICA Board member Nat Cohen and ICA members Jay Chapman and Greg McNair.

As we saw with the comments on .Travel, the only commenters supporting URS by contract at legacy gTLDs were ICANN’s Intellectual Property Constituency (IPC) and new gTLD portfolio registry operator Donuts.

An identical list of commenters and positions appears at the comment forum for .Pro.

A Staff Report on the .Cat and .Pro comments is scheduled to be filed on July 21st. But odds are that these will be late, given that the due date for the staff report on .Travel comments was July 5th but all that appears at its website is this – “Report Overdue”. It’s difficult to understand why it is taking staff so long to complete and post that document, because that Staff Report is supposed to be an objective compilation and summary of the comments received – and not a defense brief to justify the staff action of proposing the inclusion of URS in these renewal RAs that has drawn such broad criticism and opposition.

We will continue to monitor the .Travel website, along with those for .Cat and .Pro, to see when those Staff Reports are filed and what they say.

Meantime, here is what ICA said in the additional comments we filed on both .Cat and .Pro:

This comment by the Internet Commerce Association incorporates by reference and supplements the comment letter we filed in regard to the proposed renewal registry agreement (RA) for .Travel on June 21st.

The issues are essentially identical, in that:

  • The proposed RAs for. .Cat and .Pro are completely identical to .Travel in regard to incorporating the URS in Section 2 of Specification 7.
  • .Cat and .Pro are legacy gTLDs created before and for which the URS is a non-relevant implementation detail of the current new gTLD program, and is not a Consensus Policy enforceable against all gTLDs and contracted parties.
  • The notice published by ICANN regarding the proposed renewal RA clearly states that “ICANN has proposed” that the new gTLD RA be the starting point for contract renewal discussion and negotiation.

This issue of staff creation of de facto Consensus Policy arose several times at the just concluded ICANN 53 meeting held in Buenos Aires. At its opening session on Sunday morning, June 21st ICANN’s GNSO Council met with senior staff of ICANN’s Global Domains Division (GDD). Many Council members raised their own strong concerns about the staff action and its destructive impact on the GNSO’s role in making gTLD policy. GDD staff provided the weak response that “we did not push anyone to accept” the URS, maintaining that .Travel, .Pro, and .Cat registry operators had all “volunteered” to include it in their proposed renewal agreements. That justification strains credulity given that GDD staff proposed its inclusion as the starting point for registry agreement renewal.

As we stated in our comment letter regarding .Travel–

There can be no doubt that this is a staff attempt to create de facto Consensus Policy, as is clearly documented by the fact that the same objectionable provision appears in the proposed renewal RAs for .Cat and .Pro, both released for comment on May 28th. This evidences a deliberate and illegitimate attempt by contracting staff to create a series of precedents that would lead inevitably to the imposition of the URS on major legacy gTLDs such as .Org, .Net and .Com when they come up for renewal, despite the fact that the URS is not an ICANN Consensus Policy.

GDD staff also said they would change their position if the GNSO told them not to seek to impose new gTLD RPMs on legacy gTLDs – which is not only an impossibility for this proposed renewal RA, given the time required for the GNSO to establish policy via the standard PDP, but completely misunderstands and reverses the proper relationship between the stakeholders and staff. It is stakeholders who create ICANN policies through a bottom up process, which are subsequently administered by staff – not staff given free rein to initiate policy in a top down and unaccountable manner via contract negotiations until the stakeholders stop them.

The same concerns were raised when the Council met with the ICANN Board on the afternoon of June 21st, where they received a far more sympathetic reception. Several Board members agreed that staff should not initiate policy changes.

In addition to the concerns raised by Council members, and at community members at the Public Forum in Buenos Aires, the comments filed on .Travel ran overwhelmingly against incorporation of the URS in the renewal RA.

Only two comments supported the action by GDD staff to propose it as a starting point:

  • The Intellectual Property Constituency (IPC) stated that it “encourages Registry Operators to voluntarily go above and beyond the minimum rights protections. Whether adding new restrictions against abusive registrations, implementing blocking or creating new dispute procedures, those best practices should be encouraged and do not require a PDP for TLD Operators to implement”. We strongly disagree that there is anything voluntary about a process in which a supplicant registry in need of having its contract renewed must negotiate with ICANN staff who propose that inclusion of specific RPMs be the starting point for negotiations.
  • We therefore believe that legacy gTLD registry operators are not free to create and adopt new RPMs that alter the rights of existing registrants at the time of contract renewal because there is no one in the negotiating room to speak for the due process rights of their registrants. Indeed, such negotiations take place behind closed doors and are not transparent to affected stakeholders.
  • Further, the IPC’s claim that “there is clearly no requirement that an RPM must become consensus policy before it can be adopted by a registry. We have already learned that from Donuts and Rightside Registry, both of whom adopted a form of “blocking” as an RPM, which was also not consensus policy” completely misunderstands the critical difference between revenue-generating blocking policies promulgated by portfolio gTLD operators and dispute resolution policies. Blocking policies prevent domains from being registered in the first place and therefore have no impact on existing registrants, while alterations in dispute resolution policies can result in an existing registrant having its domain suspended, extinguished or transferred.
  • The IPC also fails to recognize the difference between a new gTLD, in which potential registrants have clear notice of any supplementary RPMs, and a legacy gTLD in which registrants should expect that additional RPMs will be adopted through a standard PDP that creates Consensus Policy.
  • The new gTLD portfolio operator Donuts, which maintained that the STI-RT that created the URS “never considered” whether it “should not be included in legacy TLDs”. All we can say is that Donuts’ recollection is quite different from ours, as we recall this question being raised multiple times and receiving assurances from STI-RT participants and others involved in the development of the new gTLD RPMs that they would not and could not be imposed on legacy gTLDs absent a subsequent review, followed by a PDP which adopted them as Consensus Policy.

In closing, we repeat the conclusion of our comment letter regarding .Travel —

Consensus Policy regarding RPMs must be vetted within the community to assure a proper balancing of the interests and rights of both trademark owners and domain registrants.

In order to assure that balance two indispensable steps are necessary:

  • The attempt to impose new gTLD RPMs on legacy gTLDs by contract must be withdrawn in recognition that such action is in violation of ICANN Bylaws. If staff is unwilling to retreat on this initiative then ICANN’s Board must assume responsibility and review all the issues at play, including compliance with the Bylaws, before any legacy gTLD RA with such a provision is made final.
  • Any further modification of the new gTLD RPMs must be considered within the context of a full PDP. We are far past the implementation phase of the new gTLD program. Further, it is clear that the applicability of the RPMs to legacy gTLDs is now primed for discussion. Unless both RPM modifications and legacy gTLD applicability are considered within the PDP framework there is a substantial risk of a bait-and-switch policy process, in which RPMs are made applicable to legacy gTLDs and then substantially altered via a backdoor, non-PDP process.

In addition, we repeat the request that ICA made directly to ICANN’s Board at the Buenos Aires Public Forum –

First, we need a commitment that any further alterations of the new gTLD RPMs will be made through a standard PDP. We are far past the implementation details stage and it is now crystal clear that these decisions will implicate legacy gTLDs as well.

Second, if GDD staff ignores the overwhelming weight of comments and retains the URS in the final RAs for legacy gTLDs, you need to vote up and down on those RAs. You need to “own” that decision and in that way indicate whether you believe this GDD staff action is or is not acceptable.

We hope that GDD staff will recognize that they have overreached on these legacy gTLD contracts and that the proper action is to strike the RPMs adopted from the new gTLD program from them and leave that decision to the multistakeholder community.

If staff does not do the right thing then we will press for an up and down Board vote on this and the other affected contracts before they take effect.

 

Sincerely,

Philip S. Corwin

Counsel, Internet Commerce Association

22
Jun

Comments Run Overwhelmingly Against ICANN Staff Attempt to Impose URS on Legacy gTLDs

The comment period on the proposed renewal registry agreement for the .Travel legacy gTLD closed on Sunday, June 21st and the comments submitted are overwhelmingly opposed to ICANN staff’s attempt to impose any of the new gTLD rights protection mechanisms, including Uniform Rapid Suspension (URS), on legacy gTLDs through contracting rather than a formal Policy Development Process (PDP).

In addition to ICA’s own comment (reproduced below) opposition to the contracting route were submitted by ICANN’s Business Constituency and Non-Commercial Stakeholders Group as well as the Electronic Frontier Foundation and IP Justice, plus numerous participants in the domain industry. The only outliers supporting this brazen attempt to detour around ICANN’s Bylaws were ICANN’s Intellectual Property Constituency and the Donuts new gTLD portfolio registry operator.

At its opening session on Sunday morning in Buenos Aires, ICANN’s GNSO Council met with senior staff of ICANN’s Global Domains Division (GDD). Many Council members raised their own strong concerns about the staff action and its destructive impact on the GNSO’s role in making gTLD policy. GDD staff provided the weak response that “we did not push anyone to accept” the URS, maintaining that .Travel, .Pro, and .Cat registry operators had all “volunteered” to include it in their proposed renewal agreements. That justification strains credulity given that GDD staff proposed its inclusion as the starting point for registry agreement renewal – and our friends in the registry and registrar community inform us that ICANN staff play serious hardball in closed door contracting negotiations. GDD staff also said they would change their position if the GNSO told them not to seek to impose new gTLD RPMs on legacy gTLDs – which of course will never happen for both procedural and internal political reasons.

The same concerns were raised when the Council met with the ICANN Board on Sunday afternoon, where they received a more sympathetic reception. Several Board members agreed that staff should not initiate policy changes – but there was no firm Board commitment to intervene against the staff action.

So while the battle has been joined its outcome is far from settled. ICA intends to raise this matter again at the Public Forum on Thursday afternoon. As stated in our comment letter, “if the decision is made by staff to retain these RPMs in the .Travel renewal RA following the close of the public comment period, we believe that the proposed final contract must be forwarded to, reviewed by, and voted upon by the ICANN Board”. In other words, the Board needs to “own” the final decision, and in that action demonstrate whether it is truly committed to the bottom-up consensus policy process.

Here’s ICA’s comment letter:

 

 

VIRTUALAW LLC

Philip S. Corwin, Founding Principal

1155 F Street, NW  Suite 1050 Washington, DC 20004

202-559-8597/Direct 202-559-8750/Fax 202-255-6172/Cell

psc@vlaw-dc.com

 

June 21, 2015

By E-Mail to comments-travel-renewal-12may15@icann.org

Internet Corporation for Assigned Names and Numbers

12025 Waterfront Drive, Suite 300

Los Angeles, CA 90094-2536

 

Re: Proposed Renewal of .TRAVEL Sponsored TLD Registry Agreement

 

Dear ICANN:

I am writing on behalf of the members of the Internet Commerce Association (ICA). ICA is a not-for-profit trade association representing the domain name industry, including domain registrants, domain marketplaces, and direct search providers. Its membership is composed of domain name registrants who invest in domain names (DNs) and develop the associated websites, as well as the companies that serve them. Professional domain name registrants are a major source of the fees that support registrars, registries, and ICANN itself. ICA members own and operate approximately ten percent of all existing Internet domains on behalf of their own domain portfolios as well as those of thousands of customers.

This letter addresses the Proposed Renewal of .TRAVEL Sponsored TLD Registry Agreement that was published for public comment on February 2, 2015.

Summary of Position

The ICA is strongly opposed to the inclusion of new gTLD rights protection mechanisms (RPMs), particularly Uniform Rapid Suspension (URS), in this renewal agreement (RA) for a legacy gTLD.  We believe that this attempt by ICANN contracting staff to create de facto Consensus Policy via individual registry contract, absent a relevant Policy Development Process (PDP), is a glaring example of the type of top down, unaccountable action that should be targeted by enhanced accountability measures accompanying the IANA transition proposal. Contracts with legacy gTLDs can contain and enforce Consensus Policy, but it is an impermissible violation of ICANN’s Bylaws for contracts to attempt to create Consensus Policy.

We strongly urge that Section 2 of Specification 7 of the Renewal Agreement (RA) for .Travel, which contains the URS as well as the Trademark PostDelegation Dispute Resolution Procedure (PDDRP) be deleted in its entirety. Failure to take that action, and the resulting approval of a .Travel RA that contains these RPMs, will constitute a gross and unacceptable violation of ICANN Bylaws. We hope that contracting staff will promptly take the corrective action required on this matter.

However, if the decision is made by staff to retain these RPMs in the .Travel renewal RA following the close of the public comment period, we believe that the proposed final contract must be forwarded to, reviewed by, and voted upon by the ICANN Board. The potential addition of these RPMs to legacy gTLDs through this inappropriate avenue will have a substantial and deleterious effect on ICANN’s policymaking process going forward, will create a new and dangerous precedent whereby de facto Consensus Policy can be created by contractual fiat in violation of ICANN Bylaws, and will substantially and adversely affect third parties around the world consisting of the existing registrants of more than one hundred million legacy gTLD domains.

 

Unaccountable and Uninformed Top Down Policymaking is Unacceptable

On May 13, 2015 I had the honor and privilege of addressing the Subcommittee on Courts, Intellectual Property, and the Internet of the Judiciary Committee of the U.S. House of Representatives. I spoke on ICA’s behalf at the Subcommittee’s hearing on “Stakeholder Perspectives on ICANN: The .Sucks Domain and Essential Steps to Guarantee Trust and Accountability in the Internet’s Operation”.

In my oral statement before the Subcommittee I said the following:

While enhanced ICANN accountability measures are overdue they will operate best only if ICANN’s Board and senior staff embrace a culture of accountability that assumes responsibility for the fallout of ICANN decisions and encompasses early consultation with the multistakeholder community that provides organizational legitimacy.

The current situation regarding the proposed renewal RA for the .Travel gTLD is a perfect illustration that a ‘culture of accountability’ that includes proper deference to the multistakeholder community and to the letter and spirit of ICANN’s Bylaws is presently lacking at ICANN. That is extremely dismaying and disheartening, especially for those who believe in the multistakeholder model (MSM) of governance for the unique experiment in technical DNS management known as ICANN.

When the Applicant Guidebook for the new gTLD program was being drafted I was extensively engaged on ICA’s behalf in the vigorous community debate over its RPMs. Throughout their development by the IRT, STI-RT, and then the full community I repeatedly inquired of other stakeholders as well as ICANN senior staff whether adopting these RPMs as new gTLD program “implementation details” would in any way result in their automatic application to legacy gTLDs like .Com. I received repeated assurances that this would not occur – that the RPMs could be imposed on legacy gTLDs only after their impact and efficacy was fully assessed, and then only via a standard PDP to create new Consensus Policy in conformity with ICANN Bylaws.

The present proposal to impose the URS on .Travel is a betrayal of those assurances and a clear violation of ICANN’s Bylaws. The rationale for this decision – With a view to increase the consistency of registry agreements across all gTLDs, ICANN has proposed that the renewal agreement be based on the approved new gTLD Registry Agreement as updated on 9 January 2014.” – is flimsy and unconvincing. ICANN staff possesses no legitimate authority to create and impose what amounts to Consensus Policy. Proposing that the RA take the new gTLD RA as its starting point is tantamount to creating Consensus Party given the overwhelming negotiating advantage that ICANN has in such a context.

There can be no doubt that this is a staff attempt to create de facto Consensus Policy, as is clearly documented by the fact that the same objectionable provision appears in the proposed renewal RAs for .Cat and .Pro, both released for comment on May 28th. This evidences a deliberate and illegitimate attempt by contracting staff to create a series of precedents that would lead inevitably to the imposition of the URS on major legacy gTLDs such as .Org, .Net and .Com when they come up for renewal, despite the fact that the URS is not an ICANN Consensus Policy. Acting in a manner that is consistent with ICANN’s Bylaws is far more important than consistency of RAs – if that latter principle had been paramount then there would be no RPMs at new gTLDs to begin with because they are inconsistent with the Consensus Policy in effect at legacy gTLDs.

This staff decision is all the more troubling because it was made in an irresponsibly uninformed manner without waiting for a full evaluation and identification of issues concerning the new gTLD RPMs.  On May 1st the public comment period on “Draft Report: Rights Protection Mechanisms Review” (https://www.icann.org/public-comments/rpm-review-2015-02-02-en) closed, and on May 29th ICANN staff issued a “Report of Public Comments” (https://www.icann.org/en/system/files/files/report-comments-rpm-review-29may15-en.pdf) based upon community input. The Background on that Draft Report states that it “is intended to be available to inform the Issue Report requested by the GNSO as well as the independent review of Trademark Clearinghouse recommended by the GAC. In addition, this paper will serve as input to the Review Team on Competition, Consumer Trust, and Consumer Choice to be convened under Section 9.3 of the Affirmation of Commitments, charged with assessing the effectiveness of the safeguards developed for the New gTLD Program.”

None of these additional reviews have been completed. Further, one of the major reasons that the GNSO requested the referenced Issue Report was so that GNSO’s stakeholders could decide whether those RPMs should become Consensus Policy for all gTLDs. And that Issue Report will not even be delivered until late September because policy staff requested a six-month extension of the delivery date so that additional studies and analysis could be conducted – and the GNSO Council granted that request on January 29th of this year. Yet this near-total lack of evaluated data regarding the performance of the RPMs seems not to have mattered to contracting staff.

 

Policy and Implementation Considerations

The recently published Final Report on Policy and Implementation (P&I) (https://community.icann.org/display/PIWG/Final+Report+Redline+Version) is also germane to this discussion. That Report, issued with the full consensus support of its working group, defines a “GNSO Consensus Policy” (p.9) as “A Policy established (1) pursuant to the procedure and required minimum elements set forth in ICANN’s Bylaws, and (2) covering those topics listed in Section 1.2 of the consensus policies and temporary policies specification of the 2013 RAA (see Annex I) or the relevant sections in the gTLD registry agreements (see Annex II). GNSO Consensus Policies, adopted following the outlined procedures, are applicable and enforceable on contracted parties as of the implementation effective date.” (Emphasis added)

The PDDRP and URS both fit within the cited topics but have not been adopted pursuant to the outlined procedures for stablishing Consensus Policies. Therefore, their imposition by contractual fiat on legacy gTLDs is clearly in violation of the procedural path and required minimum elements set forth in the Bylaws.

In addition, the P&I Report adopts as its first principle that “Policy development processes must function in a bottom-up manner. The process must not be conducted in a top-down manner and then imposed on stakeholders”. Yet in this instance we have ICANN staff engaged in imposing policy from the top down, first on registries and through them onto registrars and registrants. This is absolutely unacceptable. The one exception to that first principle, “emergency cases such as where there are risks to security and stability”, bears no relationship to the RPMs at issue.

Finally, the P&I Report states a first standard, which is “As outlined in the ICANN Bylaws, the GNSO is responsible for developing and recommending to the ICANN Board substantive policies relating to generic top-level domains. As such, gTLD policy development should not take place outside of the GNSO.(Emphasis added) That standard has been grossly violated by the proposed RA as it imposes staff-dictated policy decisions on legacy gTLDs absent any GNSO involvement.

 

Unfair Impact on Registrants

Registrants at new gTLDs had clear notice that they would be subject to the new RPMs. Registrants at legacy gTLDs expect that they shall only be subject to Consensus Policy adopted in accordance with ICANN’s Bylaws. The proposed RA is a complete betrayal of that legitimate expectation and is totally at odds with ICANN rhetoric in support of registrant rights. It is also likely to raise legality of enforceability issues if there is any attempt to enforce new gTLD RPMs against registrants at legacy gTLDs absent their adoption via Consensus Policy.

The danger for legacy gTLD registrants is compounded by the fact that the URS that staff is trying to impose today may differ materially from what the URS becomes in the next few years. In this regard, the Report of Public Comments on the “Draft Report: Rights Protection Mechanisms Review” was released on May 29th.

The Report’s URS section makes clear that some parties would like Uniform Rapid Suspension converted into Uniform Rapid Transfer, with additional tweaks that would put domain registrants at a substantial disadvantage in URS proceedings.

Among the ideas suggested for the URS by various commenters were:

  • Adding various forms of domain transfer options, either at the time of the decision or when the domain registration expires.
  • Lengthening the term of the domain suspension beyond the initial registration period.
  • Lowering the “clear and convincing evidence” burden of proof standard to the “preponderance of the evidence” burden used in UDRP actions – combined with changing what needs to be proved from ‘registration and use’ in bad faith to ‘registration or use’.
  • Making the URS a “loser pays” procedure.
  • Eliminating or shortening the current one-year post-decision time period in which a defaulting registrant can file for de novo appeal.
  • Requiring the registrant to pay a response fee in all filings, rather than only in those cases involving 15 or more domains, as set in the current URS rules.

Taken collectively, these suggestions would undo whatever rough balance between rights holders and registrants was achieved in the creation of the URS. They make clear that the URS could be changed in the future to become an accelerated, lower-cost version of the UDRP, with the same burden of proof plus a domain transfer option. Those two changes alone would probably cause a mass shift from UDRP filings to URS by trademark owners – thereby converting the URS from its intended use as a narrow supplement to the UDRP to a complete substitute for it. Registrants would have less time to respond, shorter word limits in which to state their replies, and be denied the option of requesting a three member expert panel. Other potential changes could be adoption of a loser pays requirement, requiring registrants to pay a response fee in all cases, and changing what must be proved by complainant to bad faith registration or use.

ICA is sensitive to some legitimate concerns of trademark owners regarding the effectiveness of the URS and we have suggested means to address those concerns without undermining registrant rights. But proposals such as those listed above illustrate that the staff attempt to put the URS in place at legacy gTLDs via contractual fiat puts the cart far before the horse. We must know what the URS is going to be before we can consider its impact on legacy gTLD registrants and debate whether it should be adopted as Consensus Policy.

It is also a dangerous and destructive approach. If staff can succeed in this effort, and if the URS is then modified for new gTLDs though a non-PDP “implementation” route, that modified URS would automatically take effect at legacy gTLDs with contract provisions such as the one that staff is attempting to impose on .Travel . The result would be a radically different URS effectively put in place at legacy gTLDs absent any compliance with ICANN Bylaws pertaining to Consensus Policy.

Consensus Policy regarding RPMs must be vetted within the community to assure a proper balancing of the interests and rights of both trademark owners and domain registrants.

In order to assure that balance two indispensable steps are necessary:

  • The attempt to impose new gTLD RPMs on legacy gTLDs by contract must be withdrawn in recognition that such action is in violation of ICANN Bylaws. If staff is unwilling to retreat on this initiative then ICANN’s Board must assume responsibility and review all the issues at play, including compliance with the Bylaws, before any legacy gTLD RA with such a provision is made final.
  • Any further modification of the new gTLD RPMs must be considered within the context of a full PDP. We are far past the implementation phase of the new gTLD program. Further, it is clear that the applicability of the RPMs to legacy gTLDs is now primed for discussion. Unless both RPM modifications and legacy gTLD applicability are considered within the PDP framework there is a substantial risk of a bait-and-switch policy process, in which RPMs are made applicable to legacy gTLDs and then substantially altered via a backdoor, non-PDP process.

 

In addition, any suggestion that legacy gTLDs can “voluntarily” adopt new gTLD RPMs that have been proposed by ICANN staff in the course of renewal RA negotiations should be rejected as specious, given the differential in bargaining leverage between a registry operator in need of a RA and ICANN staff with the power to approve or deny it.

 

Conclusion

We appreciate the opportunity to provide these comments on the proposed renewal RA for .Travel.

For all the reasons outlined above, the attempted imposition of new gTLD RPMs on this legacy gTLD are absolutely unacceptable and in gross violation of ICANN Bylaws. They must be stripped out of the RA and reserved for consideration in a future PDP by the full ICANN multistakeholder community.

While much is at stake for legacy gTLD registrants, ICANN’s own credibility is also on the line in this instance. At a time when enhanced accountability measures are being designed, a successful end run around the PDP requirements for establishing Consensus Policy would suggest the need for even stronger accountability measures than those presently under consideration. Fortunately, the accountability process will still be ongoing when ICANN decides whether to withdraw this illicit action or double down in its pursuit.

 

Sincerely,

 

Philip S. Corwin

Counsel, Internet Commerce Association

 

 

 

 

 

 

 

 

 

 

4
May

ICA to ICANN: We’ll “Vigorously Oppose” Changing URS to Facilitate RDNH

On Thursday, April 30th ICA filed a comment letter with ICANN regarding the “Draft Report: Rights Protection Mechanisms Review” published earlier this year. This preliminary report paves the way for a more extensive issues report on the new gTLD RPMs that will be delivered to the GNSO Council this fall. That second report will not only inform the debate on whether the RPMs should be changed prior to any future rounds of new gTLDs, but also may set the stage for a full-fledged policy development process (PDP) on UDRP reform that could kick off in 2016. The UDRP is the only consensus ICANN policy that has never undergone such review and reform.

In its letter ICA stated its opposition to any suggestions that a domain transfer capability should be added to the Uniform Rapid Suspension arbitration procedure:

ICA would vigorously oppose any attempt to amend the URS to provide a domain transfer option as such a rapid and circumscribed process could be readily abused to further the scourge of reverse domain name hijacking.

However, ICA does understand trademark owner concerns that domains suspended in a URS procedure can currently be re-registered for infringing purposes at the end of their registration period, and suggested an alternative win-win approach that could balance their interests with those of domain investors:

However, we are sympathetic to the concerns of trademark owners, and would suggest the alternative of permanently barring the re-registration of a URS losing domain where the domain name/trademark is not a generic term and its registration by anyone other than the rights holder would almost surely constitute infringement. This concept could also be explored in regard to generic terms registered at gTLDs whose names correspond to the goods and services for which the word is trademarked by the prevailing complainant. Such an approach would not invite URS abuse for domain hijacking purposes but would afford permanent protection to infringed rights holders – and without the unending costs associated with holding a domain defensively in a large and growing portfolio.  

Other key points made in ICA’s comment letter were:

  • ICA would not support any expansion of the TMCH matching rules to include plurals, mark+keyword, and common typos.
  • ICA supports the inclusion of more comprehensive information regarding generic words and infringement in the Claims notice, as well as clarifying under what circumstances the post-notice registration of a domain will be considered to constitute “bad faith” for UDRP and URS purposes.
  • We would not support any extension of the mandatory Claims generation period beyond the initial ninety days until our concerns about the Claims notice are effectively addressed.
  • ICA would oppose any easing of the TMCH verification requirements for court decisions or UDRP cases.

 

ICA will continue to articulate its members’ views in regard to the RPMs and the UDRP as this discussion continues within ICANN.

Trademarks and domains are both valuable intangible assets. The respective rights of their owners must be carefully balanced in any revision of these critical arbitration and brand protection policies to ensure that the asset value of domains and the due process rights of registrants are adequately protected and respected.

The full text of our comment letter follows—

 

 

VIRTUALAW LLC

Philip S. Corwin, Founding Principal

1155 F Street, NW  Suite 1050

Washington, DC 20004

202-559-8597/Direct

202-559-8750/Fax

202-255-6172/Cell

psc@vlaw-dc.com

 

                                                                                                April 30, 2015

By E-Mail to comments-rpm-review-02feb15@icann.org

Internet Corporation for Assigned Names and Numbers

12025 Waterfront Drive, Suite 300

Los Angeles, CA 90094-2536

 

Re: Draft Report: Rights Protection Mechanisms Review 

Dear ICANN:

I am writing on behalf of the members of the Internet Commerce Association (ICA). ICA is a not-for-profit trade association representing the domain name industry, including domain registrants, domain marketplaces, and direct search providers. Its membership is composed of domain name registrants who invest in domain names (DNs) and develop the associated websites, as well as the companies that serve them. Professional domain name registrants are a major source of the fees that support registrars, registries, and ICANN itself. ICA members own and operate approximately ten percent of all existing Internet domains on behalf of their own domain portfolios as well as those of thousands of customers.

This letter addresses the Draft Report: Rights Protection Mechanisms Review that was published for public comment on February 2, 2015. That document, drafted by ICANN staff, is intended to inform the Issue Report on new gTLD Rights Protection Mechanisms (RPMs) requested by the GNSO as well as the independent review of Trademark Clearinghouse recommended by the GAC. In addition, the same document is intended to serve as input to the Review Team on Competition, Consumer Trust, and Consumer Choice to be convened under Section 9.3 of the Affirmation of Commitments, charged with assessing the effectiveness of the safeguards developed for the New gTLD Program.

Executive Summary

  • ICA would not support any expansion of the TMCH matching rules to include plurals, mark+keyword, and common typos.
  • ICA supports the inclusion of more comprehensive information regarding generic words and infringement in the Claims notice, as well as clarifying under what circumstances the post-notice registration of a domain will be considered to constitute “bad faith” for UDRP and URS purposes.
  • We would not support any extension of the mandatory Claims generation period beyond the initial ninety days until our concerns about the Claims notice are effectively addressed.
  • ICA would oppose any easing of the TMCH verification requirements for court decisions or UDRP cases.

 

  • ICA would vigorously oppose any attempt to amend the URS to provide a domain transfer option as such a rapid and circumscribed process could be readily abused to further the scourge of reverse domain name hijacking. However, we are sympathetic to the concerns of trademark owners, and suggest an alternative approach that would address their concerns to a significant extent.

Trademark Clearinghouse (TMCH)

While no specific question on this issue is raised at the end of Section 3, we note that a portion of Section 3.4 (Matching Rules) states:

ICANN continues to receive feedback regarding the “identical match” definition, specifically, that ICANN should consider expansion of the matching rules to include plurals, “marks contained” or mark+keyword, and common typos of a mark. The scope of matching was one area identified by the GAC in recommending an independent review of the Trademark Clearinghouse, and this topic is expected to be explored in that review as well.

ICA already has substantial concerns, detailed in this letter, about the high number of false positive Trademark Claims Notices being generated that are likely deterring legitimate noninfringing domain registrations, especially for generic words that have one or more TMCH matches.

Further, as noted in the report, “The matching rules are intended to provide an objective, automatable way of determining a match, rather than the Clearinghouse making subjective determinations”, and any easing of the matching requirement would inevitably require the TMCH to exercise subjective judgment.

In addition, the ability to register up to fifty previously abused variations of a trademark that were found infringing in litigation or a UDRP under the Abused Domain name label service already permits rights holders some substantial degree of protection beyond exact matches.

Therefore, we would not support any expansion of the TMCH matching rules to include plurals, mark+keyword, and common typos. 

Trademark Claims Service

We first address Section 5 questions a, b, and f, which are:

  • Is the Claims notice an effective form of communication?
  • For those with registrant/customer interactions, what has been the customer response to Claims notices?
  • How could the Claims service be improved?

ICA believes that the current language of the Claims notice is unduly intimidating to potential registrants, especially those lacking any sophisticated understanding of trademark law, and that the language needs to be modified in order to clarify that registration of a generic word that is trademarked for a particular class of goods and services is unlikely to result in infringement if registered for another intended purpose.

On March 12th ICA published an article, “Estimating Trademark Claims Notice Suppression of Non-Infringing New gTLD Registrations”, which made these observations regarding statistics contained in the Report:

[T]his statistic regarding Trademark Claims Notices generated by the Trademark Clearinghouse (TMCH) leapt out:

Sum of TLDs with initiated Claims periods         297

Sum of Claims Transactions                                    96,471

Sum of Claims Notices Generated                25,221,479

That 25 million-plus Claims Notices statistic is the one that garnered attention. As of February 1, 2015 the total number of domains registered in all new gTLDs was approximately 4.2 million, so the ratio of Claims Notices to new gTLD registrations was about 6:1. That is, for each new gTLD domain that was registered there were about 6 additional registrations that were commenced for some purpose – but of that total number, only three tenth of one percent (96,471 out of 25,221,479) continued on to completing a “transaction” resulting in a domain registration.

…[since March 2014] the number of Claims Notices has increased fifty-fold, the percentage of completed registrations against TMCH inquiries has declined by more than ninety percent, and the ratio of Claims Notices to registered new gTLD domains has increased from 4:3 to 6:1. So the TMCH is clearly having a “chilling effect” – but is it primarily chilling potentially infringing or non-infringing domain registrations?

… As of January 2015 34,300 marks had been submitted for registration into the TMCH. So, on average, each registered mark generated 735 Claims Notices.

At the time the Report was issued, there were 297 new gTLDs that had initiated Claims periods, so there was an average of 85,000 Claims Notices generated per new gTLD. For the vast majority of new gTLDs that is far higher than their total domain registrations to date – indeed, only the top seven new gTLDs exceed that figure.

So what is going on here? Is the TMCH incredibly effective at deterring the registration of trademark infringing domains? Or is it incredibly effective at deterring the registration of domains with an intended use that would not infringe trademark?

It may well be a lot of both.

… No doubt there have been attempts by intentional cybersquatters to register trademarked names that have been effectively deterred when they received a Claims Notice and realized that the trademark owner would be notified of the domain registration immediately and might well take some form of legal response.

But there also may have been lots of potential registrants for non-infringing uses of short and meaningful generic dictionary words as domain labels who were spooked enough when they received the Claims Notice to abandon the registration. While the Claims Notice does provide a prospective registrant with information regarding the Jurisdiction where the trademark is registered and the class of Goods and Services that the trademark covers, most prospective registrants of non-infringing domains are not well versed in trademark law, don’t want to have to spend money to consult a lawyer to see if their registration will be infringing or not, and don’t want to risk being hit with a cease-and-desist letter, UDRP or URS filing, or a trademark infringement lawsuit. The same could be true even for potential registrants well versed in trademark law who simply don’t wish to expose themselves to a potential legal action, regardless of its merits – especially since continuing on to registration after receipt of the Notice might be alleged to constitute proof of bad faith registration.

The legalistic language of the Trademark Notice would certainly cause major hesitation for most prospective general public applicants… Revising the language of the Claims Notice to make it more understandable by a registrant lacking deep understanding of trademark law might also be considered, but that can hardly be relied upon to protect the registrant from post-registration legal action by the trademark owner.

… Summing up, the TMCH has almost surely been quite effective in deterring infringing domain registrations at new gTLDs. But it appears to also have been a substantial damper on total new gTLD domain registrations. The unanswered question is how big of a headwind it has been.

That article estimates that several million legitimate registrations may have been deterred by receipt of Claims notices, while noting that it is impossible to know the exact number.

We believe that the generation of Claims notices will continue to deter legitimate noninfringing domain registrations at new gTLDs. This situation can be partly but not completely addressed by providing more comprehensive information in the notice, and also clarifying under what circumstances the post-notice registration of a domain will be considered to constitute “bad faith” for UDRP and URS purposes. In conjunction with this observation, we would not support any extension of the mandatory Claims generation period beyond the initial ninety days until these concerns are effectively addressed.

We also address Questions i and j:

  • How effective is the inclusion of previously abused labels in protecting against trademark abuse and infringement?
  • Should the standards for verification of previously abused labels be modified?

According to the Report:

Since the introduction of the Abused Domain Name Label service in October 2013, 324 domain labels based on 158 cases have been added… ICANN has received some feedback in regard to the documentation required to verify UDRP cases. To verify that the mark that was the subject of the case is the same as the mark in the Trademark Clearinghouse record is difficult in some cases if the rights holder no longer has the UDRP or court filings or records, or where the trademark information was not included in the original complaints.

Given the great controversy generated within the ICANN community by the substance and manner of adoption of the “Trademark-plus-fifty” proposal it is rather remarkable how little it has been used, especially since it only costs $50-75 to verify a UDRP case. We have no explanation why the trademark interests who fought so hard for the “Strawman proposal” in which it was contained have made so little use of it.

We would oppose any easing of the TMCH verification requirements for court decisions or UDRP cases. Domain investors who have been the subject of such cases (increasingly in the context of attempted domain hijackings via UDRP) maintain their own records of those legal actions, and it is difficult to believe that a  rights holder which initiated a trademark case UDRP, or counsel thereof, would not have equal access to such records. Any easing of the verification requirements would inevitably invite abuse.

Uniform Rapid Suspension (URS)

We address questions a and e of Section 6:

  • How effective is this service in providing a quick and low-cost process for addressing infringement?
  • What factors could be addressed to make the URS more effective?

ICA participated in the development of the URS and understands that it is meant to be a narrow supplement to, and not a broad substitute for, the traditional UDRP. It provides rights holders with a lower cost and faster means of addressing infringing domains, especially when they are associated with such public harms as malware distribution, phishing, or spam.

In regard to this portion of the Report:

Overall, ICANN has received feedback received from the community is that the URS has produced positive results and that it works fairly well in terms of what it is designed to accomplish. It is quick, inexpensive and caters to those who have slam-dunk cases or are indifferent towards the suspension of the name solution, perhaps due to the fact they are unable to register that name. However, some rights holders have not opted to use this service due to the remedy being limited to suspension only.

There is also concern over the possibility of the domain name being registered once more by another potential infringer once it is released, thus some rights holders feel more comfortable having the domain name in their portfolio, which can be achieved via a UDRP. Indeed, initial feedback has indicated that suspension of the domain name is not a long-term solution.

The key term in that passage is that the URS “works fairly well in terms of what it is designed to accomplish”. It is no surprise that it does not work well for purposes beyond its design – a design that was worked out through consensus that emerged from months of intense discussion and negotiation within the community.

While the URS does provide a prevailing claimant with the option of extending the domain’s registration period for one additional year it is not – and was never meant to be – a permanent solution for a rights holder who wishes to permanently remove it from the pool of available domain names.

ICA would vigorously oppose any attempt to amend the URS to provide a domain transfer option as such a rapid and circumscribed process could be readily abused to further the scourge of reverse domain name hijacking.

However, we are sympathetic to the concerns of trademark owners, and would suggest the alternative of permanently barring the re-registration of a URS losing domain where the domain name/trademark is not a generic term and its registration by anyone other than the rights holder would almost surely constitute infringement. This concept could also be explored in regard to generic terms registered at gTLDs whose names correspond to the goods and services for which the word is trademarked by the prevailing complainant. Such an approach would not invite URS abuse for domain hijacking purposes but would afford permanent protection to infringed rights holders – and without the unending costs associated with holding a domain defensively in a large and growing portfolio.  

Conclusion

We appreciate the opportunity to provide these comments on the draft Report. We hope they are helpful to the ICANN community’s further consideration of this highly important matter, especially as staff work to prepare an Issue Report on new gTLD Rights Protection Mechanisms (RPMs) to be delivered for GNSO review and consideration this fall.

Sincerely,

 

Philip S. Corwin

Counsel, Internet Commerce Association

8
Oct

ICA ADOPTS RESOLUTION CHANGING MEMBERSHIP STRUCTURE, ADDING NEW BOARD MEMBER FOR JUNIOR MEMBERSHIP CLASSES AND ESTABLISHING VOTING PROCEDURES

The attached resolution was unanimously adopted by the ICA board on October 3rd.  The following email to ICA members accompanied the announcement of the resolution.
Dear ICA Members,
The board has adopted the attached resolution to implement the addition of a new board position and the changes to the membership levels that we announced previously.
In summary, the resolution-
1.  Creates a new board seat to represent those who contribute less than $25k per year;
2.  Changes the class designation for those who contribute between $1,000 and $4,999 per year from “Supporter” to “Bronze Member”.
3.  Sets the voting procedures to elect the new board representative.   Gold members receive 5 votes each, Silver members receive 3 votes each, and Bronze members 1 vote each.
The nomination period for the new board seat is open now and closes on October 31st.  Any member can place a name in nomination.  The nominee does not have to be a member of the ICA.
This resolution continues the evolution of the ICA to a more open and more inclusive association.
When the ICA started only Platinum Members ($25,000 contributors) had any board representation and the minimum contribution for membership was $5,000.  Now full membership comes with a contribution of $1,000.  A few years ago, a board seat was created to represent the “domainer” members of the ICA, which is the board seat that Nat currently occupies.  Now that more members have joined the ICA in the non-Platinum membership classes, the time is right to add a new board seat.
The underlying idea is that there is a board seat for every $25k in contributions.  Since Platinum members make a full $25k contribution, they are entitled to appoint a board member.  The contributions of other classes are aggregated and a new board seat is created for each multiple of $25k in contributions.  As more members join, the expectation is that the board will continue to grow.
Some on the forums have decried as undemocratic that those who contribute more money have a greater say in the running of the ICA.
Our view is that the ICA would not exist without the contributions of those funding it, and that it is fair that those who make the greater contribution have a greater say in the organization.  Contributions of time and effort are equally as valuable as financial contributions.  Andee Hill is a Silver level member due to her stepping forward to take on the important role of membership coordinator.
The voting system to elect the new board member is a compromise.  Some may think that every member should have one vote, regardless of the level of contribution.  Others may think that the number of votes should be directly proportional to the size of the contribution.
By granting Gold members 5 votes each, Silver members 3 votes each and Bronze members 1 vote each, we are recognizing the greater contribution that the Gold and Silver members make, while most Bronze and Silver members receive a disproportionately large say in the voting compared to the size of their contribution.  We believe this system strikes the right balance.
We appreciate your continued support and welcome your feedback as the ICA continues to evolve to better fulfill its mission.
We look forward to your nominations.
Regards,
Jeremiah Johnston
Daniel Law
Nat Cohen
ICA board members

 

ICA-Resolution-Board_Representation_Junior_Member_Classes-FINAL-October_2014