Resubmission! MarkMonitor of PF-AG Comments

[frederick felman <ffelman@xxxxxxxxxxxxxxx>]

After hearing some complaints from others we¹ve become aware that by some
error MarkMonitor¹s previous submission of comments was identified by the
ICANN comment system as a word processing document as opposed to a PDF.

Therefore, we resubmit the comments as text in email:

MarkMonitor
303 Second Street
Suite 800N
San Francisco, CA 94107
 
VIA EMAIL
 
Mr. Rod Beckstrom
President and CEO, ICANN
4676 Admiralty Way, Suite 330
Marina del Ray, CA 90292
 
Mr. Peter Dengate-Thrush
Chairman of the Board of Directors, ICANN
4676 Admiralty Way, Suite 330
Marina del Ray, CA 90292
 
December 8, 2010

Dear Mr. Beckstrom, Mr. Dengate-Thrush and the ICANN Board & Staff: 
 
MarkMonitor Inc. appreciates the opportunity to submit its general comments
to the Proposed Final Applicant Guidebook (³PF-AG²).
 
At the outset, and as stated in our preliminary comments submitted on
December 2, 2010, in each of the past comment periods MarkMonitor has had
sufficient time in order to consult with its clients, stakeholder groups and
various public and private institutions to ensure that its comments are
representative of the interests it serves.   Previous draft application
guidebook comment periods were adequate to accommodate thorough consultation
as well as adoption and endorsement of our comments by many of those who
otherwise could not participate in this process due to lack of resources. 
With this iteration of the PF-AG the brief twenty (20) working-day comment
period does not provide us with adequate time.  MarkMonitor regrets that
ICANN leadership has chosen to restrict community participation in this
manner.
 
Timing notwithstanding and in light of the recently published economic
report, the questions the report poses and the opportunities it presents,
the PF-AG should not be finalized. Subsequently, new gTLDs should not be
introduced until adequate consideration is given to the most recent economic
report and action is taken to: (i) increase the benefits created by the new
gTLD program, and, (ii) decrease the potential economic harm to consumers
and businesses.   
 
MarkMonitor appreciates the efforts of ICANN Board and Staff as well as the
Internet community as a whole for their valuable efforts to expand the
namespace through the introduction of new gTLDs.  However, MarkMonitor
believes that new gTLDs should also be introduced in a rational, controlled
and informed manner.  To that end, the ICANN Board should consider a limited
and discrete introduction of new gTLDs in the first round in order to
mitigate risks and maximize the economic and social benefits of the program.
 
Recent Economic Reports:
 
On June 16, 2010, ICANN posted an economic report called the ³Economic
Framework for the Analysis of the Expansion of Generic Top Level Domain
Names² by Michael L. Katz, Gregory L. Rosston and Theresa Sullivan
(³Economic Framework²).   This Economic Framework document was commissioned
by ICANN, and, specifically called for a group of economists to ³consider
and propose new empirical studies that could help assess costs and benefits
of new gTLDs.[1] The Economic Framework document did just that; it called
for further studies to measure the costs and benefits of the introduction of
any new gTLDs.  The Economic Framework document also recommended ³[that] it
may be wise to continue ICANN¹s practice of introducing new gTLDs in
discrete, limited rounds.²  It also stated that Š³is impossible to predict
the costs and benefits of new gTLDs accurately.  By proceeding with multiple
rounds, the biggest likely costs‹consumer confusion and trademark
protection‹can be evaluated in the earlier rounds to make more accurate
predictions about later rounds². Notwithstanding this valuable
recommendation, ICANN is continuing to forge ahead with a launch that could
encompass up to 1000 new gTLDs in the first round. ICANN¹s plan for
introducing new gTLDs is not rational, controlled nor informed and
specifically ignores the recommendations of the economic studies
commissioned.
 
On December 3, 2010, just before the Cartagena Meeting, ICANN posted its
follow-up economic report entitled ³Economic Considerations in the Expansion
of Generic Top-Level Domain Names, Phase II Report: Case Studies
<http://www.icann.org/en/topics/new-gtlds/phase-two-economic-considerations-
03dec10-en.pdf> ² by Michael L. Katz, Gregory L. Rosston and Theresa
Sullivan (³Economic Report Phase 2²).  The Economic Report Phase 2 ³proposed
a set of empirical studies designed to provide evidence regarding the likely
relative costs and benefits of new gTLDs based on experience from other TLDs
and market behavior.² Although there has been insufficient time to fully
analyze the data and analysis presented in this document, a brief review of
this report has been enlightening. The Economic Report Phase 2 analyzed
several gTLDs including, .mobi[2]  and .museum[4]  and found little, if any,
consumer benefit to any of these gTLDs.  Though unfounded by any empirical
data, the Economic Report Phase 2 suggests that despite the poor
participation in and, lack of content on the studied gTLDs ³it should also
be noted that, if ICANN were to delegate hundreds or even thousands of
gTLDs, then web site visitors might begin to think about and use gTLDs in a
new way, placing greater reliance on them as certification and navigation
tools.²[5]   This Pollyanna point of view relies on the ³Field of Dreams²
logic that if they build it, they will come.  The conclusions also appear to
diverge from the initial recommendations from this team of economists to
introduce a limited number of gTLDs. This most recent report supports the
notion that acting in this way could be both too expensive and too risky for
the community, consumers, companies and the Internet to sustain. 
 
The Economic Report Phase 2 also states that external costs to trademark
owners ³imposed by new gTLDs increase with the number of new gTLDs, the
proportion that have a dangerous probability of leading to fraudulent uses
of a company¹s protected intellectual property rights, and the cost per
registration²[6]  Moreover, the World Intellectual Property Organization
(³WIPO²) has recently reported that UDRP cases are at a record level[7]
that stands as a strong indicator that brand abuse continues to grow.  With
the possible exception of Internationalized gTLDs, the economic report
supports the conclusion that the introduction of new gTLDs introduces
greater costs without creating significant benefits.
 
Decreasing Costs by Reducing Harm: Right Protection Mechanisms (RPMs):
 
The Economic Report Phase 2 states that ³external costs to trademark owners
imposed by new gTLDs increase with the number of new gTLDs².[8]  
Furthermore, the study shows that with the release of each new gTLD we can
glean valuable information which, if implemented expeditiously, could reduce
costs to companies and reduce consumer harm (separately from the abuse
suffered by big brand holders and others). Thus, MarkMonitor renews its call
for ICANN to strengthen the proposed trademark protection mechanisms now
detailed in the current version of the PF-AG.[9]   As we have repeatedly
indicated, the current RPMs[10] still do not provide the proper protection
to brand rights holders.  Moreover, persistent calls from MarkMonitor for
resolution of these issues in our previous comments have gone unaddressed. 
MarkMonitor supports and echoes the comments by WIPO as detailed in its
posted comments and further elaborates on several concerns that are still
plaguing the current RPMs.
 
First, the Trademark Clearinghouse (TC) does not provide any affirmative
protections for brand holders given that it is simply a database that is
intended to make the existing Trademark Claims and Sunrise Period processes
more efficient.  MarkMonitor believes that both the Trademark Claims and the
Sunrise Period processes should be required for pre-launch by every gTLD
registry.  The TC will also require an additional charge for brand holders
and will not provide comprehensive coverage given that only identical marks
can be registered within the TC.  Moreover, common law marks are left out
from any consideration. Also, the addition in the PF-AG of a use
requirement, although ostensibly not problematic for US registrants, could
have certain negative implications for international registrants.
 
In addition, the URS (as currently proposed) is neither efficient nor
cost-effective.  The URS was conceived to be a quick remedy for clear cases
of cybersquatting. The original process was intended to be faster than the
already existing UDRP. Yet, even with the modest reduction in days between
filing and a required response (from 20 to 14 days) in the most recent
version of the PF-AG, the URS continues to be a longer process than is
practical.  Moreover, the burden of proof is higher under the URS than the
burden under the UDRP.  Regardless, given that the ultimate remedy yields
only the suspension of a name, it is likely that the majority of brand
holders will be forced to buy a domain name in each gTLD corresponding to
their trademarks or will be filing requisite UDRPs as opposed to relying on
the equally time consuming and costly URS process.
 
Finally, the entire goal of the original recommendations of the
Implementation Recommendation Team (IRT) was to provide for a ³tapestry of
rights protection mechanisms² that, working together, would give brand
holders the necessary safeguards.  By cherry picking (and modifying) the
originally proposed RPMs, the PF-AG leaves brand holders in no better
position than it was prior to the addition of new RPMs.   In addition, the
Economic Report Phase 2 seems to suggest that a trademark block has
significant value for brand holders.[11]  Thus, MarkMonitor again calls for
the introduction of the Globally Protected Marks List as an additional and
critical mechanism to protect brand holders (successfully employed in the
recent .CO launch).
 


Increasing Benefits While reducing Risk: Limited and Discrete Rollout
 
ICANN has indicated that there is uncertainty with respect to the potential
benefits to the launch of new gTLDs. This uncertainty was also referenced in
the Economic Report Phase 2 document[12].  MarkMonitor believes that the
program can yield greater community benefit by introducing a limited and
discrete number of gTLDs in a rational, controlled and informed manner. To
that end, this initial rollout should be limited to only community-based
gTLDs.  With a small, managed roll-out, ICANN will be able to 1) test the
unchartered and highly complex procedures and processes outlined in the
PF_AG including extended evaluation, string contention, and other
processes,  2) validate that the new rights protection mechanisms will
function as expected, and, 3) ensure that technical and operational systems
support expansion of the namespace. This will also resolve any potential
issues that may arise relating to security and stability and satisfy the
GAC¹s request for universal resolvability of the DNS[13].  Moreover, this
limited and discrete roll-out will also allow ICANN to set up the necessary
infrastructure to monitor the problems and progress of each of the gTLDs.
 
This position is receiving growing support in the ICANN community as
follows:
 
-      GAC letter dated September 23, 2010 advised ICANN to conduct "a small
pilot
   programme"  "to refine and improve the application rules for subsequent
rounds." 
 
-      ICANN¹s recent Economic Framework document indicated that it might be
wise for
   ICANN to continue its ³practice of introducing new gTLDs in discrete,
limited rounds"   
 
-      US Government (NTIA) letter dated December 2, 2010 which raises broad
concerns
  about the introduction of new gTLDs and concerns about ICANN¹s Affirmation
of
  Commitments.
 
There is a clear and growing call from with the Internet community for ICANN
to consider limiting the scope and number of gTLDs that will be launched in
the first round. As stated above, this, at a minimum, will allow ICANN to
better assess and evaluate the potential costs and benefits to consumers and
the Internet community as a whole.
 


 
Conclusion
 
There are many of issues that remain to be resolved before ICANN can
continue with the introduction of gTLDs.  These include making changes that
are supported by the recent economic reports that would increase the
likelihood of realizing greater benefits from the program as well as
decrease the costs to impacted parties.  Refining the rights protection
mechanisms and limiting the scope of the first round of applications would
allow the community to enjoy the net benefits of this program by releasing
the new gTLDs in a rational, controlled and informed manner. 
 
We look to forward to working with ICANN and the community to affect a
successful launch of new gTLDs.
 
Respectfully submitted,
 
 
 
Frederick Felman
MarkMonitor Inc.


[1] <#_ftnref1>  ³[The Economic Framework report]Šplanned and structured to
address open questions and to provide information about how best to
structure rules for new gTLDs². See Page 1.

[2] <#_ftnref2>  Only 37% percent of registrants renewed their dotmobi
domain names two years later.   See Page 20.

[3] <#_ftnref3>  The Economic Report Phase 2 states that ³registration data
suggest that both the affirmative and defensive benefits of .aero
registrations are low.²   See Page 36.
 

[4] <#_ftnref4>  The Economic Report Phase 2 states that only ³Š13 percent
(15 domains) [of .museum registered domain names] had museum content that
was not available on domains registered in other gTLDs.²  See Page 29.
 

[5] <#_ftnref5>  See Economic Report Phase 2, Page 37.

[6] <#_ftnref6>  See Economic Report Phase 2, Page 57.

[7] <#_ftnref7> http://www.wipo.int/amc/en/domains/statistics/cases.jsp

[8] <#_ftnref8>  ³The introduction of new gTLDs will trigger defensive
registrations and impose associated costs on trademark owners if they feel
the need to register in additional gTLDs to protect their intellectual
property rights, or to prevent fraud or counterfeiting².  See Economic
Report Phase 2, Page 57.

[9] <#_ftnref9>  The GAC indicated in its 23 September 2010 letter to the
ICANN Board that it ³Šurges ICANN to ensure that all new rights protection
mechanisms complement the existing UDRP.²
 

[10] <#_ftnref10>  With respect to the Post-Delegation Dispute Resolution
Procedure (PDDRP) we agree with and incorporate the comments made by the
World Intellectual Property Organization (WIPO) Arbitration and Mediation
Center (http://forum.icann.org/lists/4gtld-guide/msg00003.html).

[11] <#_ftnref11>  There is value in giving trademark holders the ability to
block the use of trademarked terms beyond a sunrise period. See Economic
Report Phase 2, Page 74.
 

[12] <#_ftnref12>  The case studies also highlight the fact that, at the
time an application for delegation of a new gTLD is submitted, the
magnitudes of both incremental benefits and incremental costs will very
likely be uncertain and will vary by application. See Economic Report Phase
2, Page 74
 

[13] <#_ftnref13>  ³In the GAC¹s view, [straightforward, non-sensitive and
uncontroversial proposals] could be considered as part of a fast track first
round.² Letter to ICANN Board by GAC, September 23, 2010