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

[Mike Roberts <mmr@xxxxxxxxxxxxxxxxx>]

Ron -

Applaud your search for clarity.  There's only one possible response:

"What is it you don't understand about closed monopoly generic gTLDs?  The 
answer is no."

- Mike


On Mar 7, 2013, at 9:20 AM, Ron Andruff wrote:

> 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 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)  
>  
> 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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