RE: [bc-gnso] RE: McCarthy/Franklyn comments on closed generics

["Ron Andruff" <randruff@xxxxxxxxxxxxxxx>]

Dear colleagues,

 

I hesitate to wade into the middle of a lawyer's debate (not being one), but
there are some relevant points being made in this discussion and I would
like to highlight that.  Both Phil and Mike have 'dogs in this fight' as
they say, and for the record I do not.  It seems to me that even though the
BC has some members who are applicants for generic words, the BC as a whole
needs to have more discussion on this matter to get some clarity and sadly
I, for one, am not seeing enough discussion on this list.  Generic words as
TLDs is a BIG deal and it behooves us to flesh this out and take a position
on it one way or the other (allowing for dissenting statements to the
greater BC position).  To turn a blind eye is to ignore the elephant in the
room, in my view.  Lack of action could also send a message that the members
are so conflicted that the BC neglected its responsibility to bring the
voice of small and big business to the ICANN debate on this matter.

 

With regard to Mike's comment: ".care much more about the problem of .sport
and .sports, for example, coexisting as ICANN appears set to allow.  That
seems to have a much higher likelihood of massive consumer confusion."   I
believe this issue needs to be pushed back both vigorously and rapidly,
before it can gain a foothold.  Clearly, plurals and singular words are
confusingly similar. one only need pronounce both words right after each
other to hear how confusingly similar they are.  

 

These are my two cents!  I welcome hearing other members' thoughts on these
two critically important issues.

 

Kind regards,

 

RA

 

Ronald N. Andruff

RNA <http://www.rnapartners.com>  Partners, Inc.

  _____  

From: owner-bc-gnso@xxxxxxxxx [mailto:owner-bc-gnso@xxxxxxxxx] On Behalf Of
Phil Corwin
Sent: Wednesday, March 06, 2013 3:15 PM
To: mike@xxxxxxxxxxxxxx; 'bc - GNSO list'
Cc: 'IPC Discussion List'
Subject: RE: [bc-gnso] RE: McCarthy/Franklyn comments on closed generics

 

Mike:

 

I appreciate the disclosure in the attachment that you represent "a number
of applicants intending to operate 'Single-Registrant' TLD models as allowed
by the terms of the Final Applicant Guidebook and Draft Registry Agreement".

 

While you know that I love to engage in vigorous legal and policy debate, I
regret that I don't have the bandwidth today to respond to all your
questions because of client work being done under deadline. I have no doubt
this dialogue will continue, and others on the distribution list can of
course join in, and I look forward to further engagement myself when my In
Box is a bit less overflowing. 

 

I would state that if .brands and closed generics are viewed as joined at
the hip, my personal preference would be to deny the COC exemption to closed
generics and allow .brands to amend their applications so that they are for
non-generic terms (e.g., let Microsoft apply for single registrant operation
of, for illustrative example,  .mswindows, Apple for .iApple, etc.) These
are not multi-registrant gTLDs that need to attract intuitive type-in
traffic, and to the extent they may be used for external as well as internal
purposes they have the marketing clout to readily educate customers,
suppliers, and Internet users regarding their proprietary right of the dot
address.

 

I do note that while your attachment asserts that "ICANN has reopened a
significant policy issue that was debated many years ago", neither it nor
your e-mail address a central point I've made - that the registry agreement
requires adherence to the COC, that the COC generally restricts
self-registrations by the registry operator, and that the Section 6
exemption for single-registrant gTLDs requires an ICANN discretionary
decision and application of a public interest standard. I know of no prior
debate on what that public interest standard should be. Any comment on the
relevance of the Code of Conduct to this discussion? I'm sure your clients
must have been aware of it as they prepared their applications.

 

Best,

Philip

 

 

 

Philip S. Corwin, Founding Principal

Virtualaw LLC

1155 F Street, NW

Suite 1050

Washington, DC 20004

202-559-8597/Direct

202-559-8750/Fax

202-255-6172/cell

 

Twitter: @VlawDC

 

"Luck is the residue of design" -- Branch Rickey

 

From: owner-bc-gnso@xxxxxxxxx [mailto:owner-bc-gnso@xxxxxxxxx] On Behalf Of
icann@xxxxxxxxxxxxxx
Sent: Wednesday, March 06, 2013 2:03 PM
To: Phil Corwin; 'bc - GNSO list'
Cc: 'IPC Discussion List'
Subject: RE: [bc-gnso] RE: McCarthy/Franklyn comments on closed generics

 

Phil,

 

My disclosure is contained at the head of my response to ICANN's request for
public comments, attached.  

 

You have not tried to answer some key questions.  Why should Microsoft get
to keep .windows closed from the rest of the world?  What about the fact
that almost all 'generic' words in fact are registered as trademarks?  What
about the fact that generic terms have been exclusive domain name property
since the beginning of the DNS, apparently with no adverse impact on either
competition or consumer confusion?  Why should TLD policy be any different?

 

It has been very difficult for me, personally, to criticize Professor
McCarthy.  He is quite simply the best teacher I have ever had, and taught
me the core principles of trademark law on which I have built my career.
But he is wrong here, his reasoning is speculative and suspect on this
important point, as I have tried to explain.  I would love to see his or
your answers to my questions.

 

Mike Rodenbaugh

RODENBAUGH LAW

tel/fax:  +1.415.738.8087

http://rodenbaugh.com 

 

From: Phil Corwin [mailto:psc@xxxxxxxxxxx] 
Sent: Wednesday, March 06, 2013 10:12 AM
To: mike@xxxxxxxxxxxxxx; 'bc - GNSO list'
Cc: IPC Discussion List
Subject: RE: [bc-gnso] RE: McCarthy/Franklyn comments on closed generics

 

Mike:

 

With all respect, Prof. McCarthy's 7-volume treatise on Trademarks and
Unfair Competition has been cited in more than 3,000 judicial opinions
http://en.wikipedia.org/wiki/J._Thomas_McCarthy. So I would hesitate to
agree that he is "obviously wrong" on this matter.  At a minimum, given all
the time and energy that ICANN has devoted to respecting and protecting
trademarks through such new gTLD RPMs as the TMC and URS, his expert view on
the incompatibility of closed gTLDs with trademark law should be taken very
seriously.

 

While I personally disagree that closed generics [which I regard as
applications in which it is proposed that the registry operator be the sole
registrant in a proposed string in which the applicant holds no trademark
rights; that is, not a .brand] don't raise trademark law concerns, I do
concur that competition issues also arise and may even be the primary issue.
In that regard, as well as in regard to claims that the ICANN request for
comments on closed generics somehow raises a new issue, sets a precedent for
major changes in the Applicant Guidebook, or portends an unfair change in
rules that applicants relied upon, I would respond that the need to obtain
an exemption from the Code of Conduct (COC) for a closed registry has always
been present, as well as the application of a public interest standard to
the granting of such a waiver, and that applicants cannot now claim surprise
or ignorance.

 

Section 2.14 of the Registry Agreement has always stated that a registry
operator must comply with the COC set forth at Specification 9.

 

Section 1.b of the COC has always stated that the registry operator and its
parents, affiliates, subcontractors, or other related entities can only
register domains in the registry to a very limited extent - restricted to
names that are reasonably necessary for the management, operations, and
purpose of the TLD.

 

Section 6 of the COC provides for an exemption process whereby ICANN may, in
its sole discretion and conditioned on its "reasonable satisfaction", allow
the registry operator to register and maintain  all domain registrations for
its own exclusive  use - if ICANN determines that "application of this Code
of Conduct to the TLD is not necessary to protect the public interest". My
understanding of the exemption clause is that it arose from the BC to
accommodate .brands, without any contemplation that certain applicants would
seek to lock up dozens of key dictionary words for their own exclusive use
(in fact, their goal may be less to use the registries than to deny access
to current and potential competitors).

 

So in my view this debate is not about creating a new definition for "closed
generics" but whether the public interest requires ICANN to deny exemption
requests for proposed non-.brand closed registries. (And I absolutely reject
the sophistic and unconvincing arguments I have seen that an applicant can
bypass the exemption process entirely  by simply declaring that its gTLD's
"purpose" is to be for its own exclusive use - that would allow the
exception to swallow the rule and render Section 6 a pointless nullity.)

 

My personal view is that closed generic gTLDs are inherently
anti-competitive monopolies and that ICANN should adopt a position that
denial of such exemption requests is necessary to protect the public
interest. These applications are incompatible with the competition and
innovation justifications made for the new gTLD program because they are
motivated by anti-competitive self-interest and the goal of denying these
strings as a platform for pro-competitive innovation to others. New gTLDs
are the perfect platform for competitive vertical search - are competition,
innovation and the public interest better served by a .book for Amazon's
exclusive use and protection of its existing dominance, a .search for
Google's exclusive use and protection of its existing dominance,  or by open
gTLDs for those strings that can be utilized by thousands of innovative
market entrants?

 

I further believe that such a position is in ICANN's best long-term
interest, as well as the interest of all who want to preserve its
multi-stakeholder model against governmental intrusion. While it is true
that the competitive issues raised by closed gTLDs are the ultimate
responsibility of national competition authorities, ICANN will do itself no
favors if it approves closed generic gTLDs that subsequently require years
of investigation, enforcement actions, and expenditure of human and
financial resources (in an era of constrained public resources) by such
authorities when the matter could have been avoided in the first place by
adopting a responsible position of the public interest consideration for
granting COC exemptions.

 

A final consideration is the potential spectacle of thousands of closed
generic applications flowing into ICANN on the second round if it
accommodates them in the first. Domain and marketing consultants will surely
be advising the world's largest companies that if they don't file
applications to lock up key dictionary words for their own  primary
commercial activities that their competitors may well grab then and close
them off. ICANN could well realize a $billion in application fees in the
second round by marketing key words in the world's major languages for the
purpose of locking them away rather than making them available to global
Internet users. I for one find the prospect of selling off exclusive use of
such words as if they were municipal  stadium naming rights to be crass and
unseemly and, while in ICANN's financial interests, inconsistent with its
responsibilities and role of managing the DNS in a manner consistent with
the public good.

 

In closing, while I shall leave it to Professor McCarthy to decide whether
to take offense and respond to your assertion that his comment letter
constitutes an "apparent conflict of interest" because of Microsoft's
sponsorship of the annual McCarthy Symposium, I am incredulous that he would
make the statements contained in his comment letter if he did not fully
subscribe to them. For the sake of full disclosure, while the views
expressed above are my personal views, I am providing counsel to a new gTLD
applicant that is in contention with a Google application for a closed
generic (ICA, the client with whom I am generally associated and which I
represent on the BC, did not have a consensus among its members on closed
generics). For the sake of full disclosure, and especially given your
assertion that Professor McCarthy's comments evidence a conflict of
interest, will you disclose whether you are advising applicants for closed
generics?

 

Regards,

Philip 

 

 

 

 

 

Philip S. Corwin, Founding Principal

Virtualaw LLC

1155 F Street, NW

Suite 1050

Washington, DC 20004

202-559-8597/Direct

202-559-8750/Fax

202-255-6172/cell

 

Twitter: @VlawDC

 

"Luck is the residue of design" -- Branch Rickey

 

From: Mike Rodenbaugh [mailto:mike@xxxxxxxxxxxxxx] 
Sent: Wednesday, March 06, 2013 11:43 AM
To: Phil Corwin; 'bc - GNSO list'
Cc: IPC Discussion List
Subject: RE: [bc-gnso] RE: McCarthy/Franklyn comments on closed generics

 

Phil, thanks for sending around Prof. McCarthy and Prof. Franklyn's
statement on so-called 'closed generic' TLD strings.  I have great respect
for Prof. McCarthy; he taught me trademark law at USF in the early '90's and
his treatise is a leading authority.  However, this statement is not
persuasive.  The fundamental premise you quote is obviously wrong.  

 

While trademark law, by definition, may prohibit trademark registration of
generic terms, it does not and has never prohibited individuals from gaining
exclusive property rights in generic terms.  There are millions of generic
terms that are the subject of exclusive domain name property rights, i.e.
chocolate.com, sex.com, etc.  Many countries recognize that chocolate.com,
for example, can function as a trademark even for the service of selling
chocolate, particularly after a period of exclusive use by which
distinctiveness is acquired.  As you well know, there are many such
trademark registrations in many jurisdictions.  Exclusive ownership has
always been permitted in regards to domain names at all levels of the DNS -
including the top level.  Why should there be any policy difference between
TLDs and .com domains?  Though the US has been more conservative in granting
trademark rights in domain names or TLD strings, no US law has ever sought
to prohibit exclusive use of generic domain names, and many arguably generic
words are registered as marks for related goods and services (as well as a
few arguably generic TLD strings).  Indeed many TLD operators and
prospective TLD operators have secured trademark registration in their TLD
string, some in the U.S. and many more in Europe and elsewhere.

 

As Prof. McCarthy taught me and thousands of others, trademark law seeks to
prevent confusion as to source of a good or service.  The type of confusion
he and Prof. Franklyn cite in their statement on this issue has nothing to
do with product source, and is purely speculative.  They say (and you
quote):

 

"consumers may mistakenly believe they are using a gTLD that allows for
competition, when in reality the gTLD is closed and the apparently
competitive products are being offered by a single entity"

 

They are speculating, without citation to any evidence or authority, that
consumers "may" be confused as to some aspect or quality of the TLD service,
but that has nothing to do with confusion as to the source of that service.
They are speculating that the marketing of such TLDs will be confusing, when
there is no factual basis whatsoever for such speculation.  Web users have
had long exposure to generic domain names used by myriad businesses,
including well-known brands, throughout the world for more than 20 years,
with absolutely no confusion ever documented as far as I am aware.  That
evidence ought to trump the blank speculation even of well-respected
trademark academics.

 

Furthermore, they do not address why Apple Computer should get to own .apple
or Microsoft should get to own .windows (among many other examples of
'generic' dictionary words that are trademarks, and that will be closed
TLDs), and exclude anyone else from registering domains in that TLD, even if
they want to refer to the fruit or to the glass building component.  They do
not address how consumer confusion in that case would logically be any
different than the consumer confusion they posit.

 

Finally, it must be noted that the annual McCarthy Symposium, probably not
coincidentally held just a few days ago, counts on Microsoft as its major
sponsor.  And of course Microsoft has become one of the most outspoken
critics of so-called closed generic TLDs, quite curiously despite its own
applications for .docs, .windows and other 'closed generic' TLDs.  

 

Given this apparent conflict of interest, the blatantly faulty premise in
its core reasoning, and the misguided speculation as to future consumer
expectations that appears central to their argument, this one page statement
leaves a lot of questions and is far from persuasive, imho.   

 

This is not a trademark issue, but a competition issue.  It is also an issue
of fairness given that closed business models have been accepted by the
community since 2006, and many companies have invested heavily in reliance
on the fact that such models are not prohibited by ICANN's rules.  All
companies had the same opportunity to make such investments.  The primary
voices arguing against these models now are surrogates for those who passed
on the opportunity (and, curiously, Microsoft), those who are competing in
contention sets with closed business models, and those who want to sell
unrestricted domain names and fear disruption to the traditional domain name
business model on which they have built their business.  Those patently
self-interested concerns are not the sort of concerns that should make any
difference to ICANN at this point in the new TLD program, or to anyone else
in the world.

 

We should all care much more about the problem of .sport and .sports, for
example, coexisting as ICANN appears set to allow.  That seems to have a
much higher likelihood of massive consumer confusion than does the operation
of closed TLDs.

 

Best,

Mike

 

Mike Rodenbaugh

RODENBAUGH LAW

tel/fax:  +1.415.738.8087

http://rodenbaugh.com 

 

From: owner-bc-gnso@xxxxxxxxx [mailto:owner-bc-gnso@xxxxxxxxx] On Behalf Of
Phil Corwin
Sent: Friday, March 01, 2013 4:29 PM
To: Steve DelBianco; bc - GNSO list
Subject: [bc-gnso] RE: Contention sets for new gTLDs

 

"Unbelievably, they did not consider the singular and plural versions of key
words to be confusingly similar."

 

Unbelievable indeed.  How about .dumb and .dumber?

 

Meanwhile the leading trademark authority in the United States, Professor
Thomas McCarthy,  has just filed a statement opposing closed generic gTLDs
as being inconsistent with trademark law and its goals --
http://forum.icann.org/lists/comments-closed-generic-05feb13/msg00034.html
--

 

"Trademark law in every country in the world forbids individuals to gain
exclusive

property rights in generic names of products. One of the primary rationales
for this rule is to

prevent a single person or company from gaining an unfair competitive
advantage in the

marketplace. Private ownership of generic language is not consistent with
free enterprise and

fair competition in an open economy. If ICANN were to approve closed,
generic gTLDs, these

important goals would be undermined.

 

Transparency and consumer choice are goals of the trademark system of every
country in

the world. In our view, these values are threatened by closed, generic
gTLDs. Indeed, should

these types of new gTLDs be approved, consumers may mistakenly believe they
are using a

gTLD that allows for competition, when in reality the gTLD is closed and the
apparently

competitive products are being offered by a single entity. This would allow
the owner of the

generic gTLD to gain exclusive recognition as the provider of a generic
service, something that

is prohibited by Trademark law."

 

How will that reflect on ICANN and the new gTLD program?

 

Philip S. Corwin, Founding Principal

Virtualaw LLC

1155 F Street, NW

Suite 1050

Washington, DC 20004

202-559-8597/Direct

202-559-8750/Fax

202-255-6172/cell

 

Twitter: @VlawDC

 

"Luck is the residue of design" -- Branch Rickey

 

From: owner-bc-gnso@xxxxxxxxx [mailto:owner-bc-gnso@xxxxxxxxx] On Behalf Of
Steve DelBianco
Sent: Friday, March 01, 2013 6:50 PM
To: bc - GNSO list
Subject: [bc-gnso] Update: Contention sets for new gTLDs

 

Wanted you all to see this.   I think it will reflect poorly on ICANN's
expansion of TLDs. 

 

ICANN hired an international expert panel to scour 1900 new TLD strings and
determine which were confusingly similar, so they could be combines in the
same contention set.  

 

This is to ensure we don't delegate 2 TLD strings that would confuse
Internet users because they are too similar.  I expected, for example, that
the applications received for .hotel and .hotels would be in the same
contention set, since it would be confusing for users to have both TLDs out
there.  (It would increase the cost of defensive registrations, too, since
hotels would have to buy domains in both TLDs.  )

 

After several months of careful study, ICANN's experts published their
contention sets yesterday. (link
<http://www.icann.org/en/news/announcements/announcement-26feb13-en.htm> )  

 

They "identified" 230 "exact match contention sets" where multiple
applicants sought the exact same string.

 

And they found just 2 "non-exact match contention sets"  (unicom and
unicorm; hoteis and hotels )

 

Unbelievably, they did not consider the singular and plural versions of key
words to be confusingly similar.  

 

This means we will get new TLDs for both the singular and plural versions of
keywords such as:

 

ACCOUNTANT ACCOUNTANTS

AUTO  AUTOS

CAR CARS

CAREER CAREERS

COUPON COUPONS

CRUISE CRUISES

DEAL DEALS

FAN FANS

GAME GAMES

GIFT GIFTS

HOME HOMES

HOTEL HOTELS

HOTEL HOTELES

KID KIDS

LOAN LOANS

MARKET MARKETS

NEW NEWS

PET PETS

PHOTO PHOTOS

REVIEW REVIEWS

SPORT SPORTS

TOUR TOURS

WEB WEBS

WORK WORKS

 

What are the implications for applicants?   Well, let's take an example.
The 2 Applicants for .GIFT just got a huge gift from ICANN when they were
not placed in the same contention set as the 2 applicants for .GIFTS

One of the 2 .GIFT guys must prevail in their "singular" contention set.
They can then proceed to delegation, as they planned.  Or they can negotiate
to be bought-out by the winning applicant from the plural contention set (
.GIFTS ).

In other words, many applicants dodged a bullet by escaping from contention
with their singular/plural form competitors.   My guess is they want to
explore ways to monetize their good fortune. 

 --

Steve DelBianco

Executive Director

NetChoice

http://www.NetChoice.org and http://blog.netchoice.org 

+1.202.420.7482 

 

 

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