[gnso-dt-wg] more Pike & Fisher coverage of Tasting WG
IP Owners Say ICANN Should Remove Add-Grace Period for Domain Registrations (Pike & Fisher, 100907) By By Christine Mumford The Internet Corporation for Assigned Names and Numbers' recent fact-finding campaign into domain tasting yielded an enormous response, with most participants identifying intellectual property rights owners among those most disadvantaged by domain tasting, a report issued Oct. 4 suggested. The report, "Outcomes Report of the GNSO Ad Hoc Group on Domain Name Tasting," synthesized the findings of various questionnaires ICANN distributed in August and September to seek further information on the "tasting" epidemic. Domain tasting occurs when a person registers a domain name, sets up pay-per-click ads on the associated web site, and waits to see if the site generates ad income. Domains that are not profitable are dropped, a function of domain registration's "add-grace" period. According to the report, IPR owners and their representatives largely favor removing the AGP as a way to combat tasting. Registrars, however, identified ways that the AGP extends benefits to registrants unrelated to tasting. The responses from the registrar community suggested that the AGP be curtailed, but not removed entirely. Answers from Various Sources ICANN first issued a broad questionnaire to all Internet users and interested parties, then invited constituencies within ICANN to send more tailored questionnaires to their participants. Dedicated questionnaires went to the intellectual property constituency and Uniform Dispute Resolution Policy (UDRP) providers, and specific responses to tasting were sought from the registrar constituency and country-code top-level domain owners, among others. IPR Owners Harmed. When asked to identify parties harmed by domain tasting, 81 percent of respondents to the general questionnaire identified IPR owners, and "a clear majority of respondents claim[ed] that the disadvantages with domain tasting outweigh the benefits," the report said. The general questionnaire received over 200 responses, divided among nine categories. The report conceded that "most" responses came from parties identifying themselves as IPR owners, although participants could select more than one designation. In other words, a party could legitimately identify as an individual Internet user, a registrant, and an IPR, or any other combination of categories. Regardless of the affiliation of the respondent, the report documented several patterns in the comments received. The responses consistently identified the following as among IPR owner disadvantages: * short-term trademark infringement; * erosion of brand names through user confusion; * erosion of reputation through users diverted to dubious sites; * loss of revenue through diversion; and * increased monitoring costs. Responses to the IPC's questionnaire provided more detail on these disadvantages. Though targeted at trademark and brand owners, all interested parties were invited to respond. In all, the IPC received 115 responses, the great majority of which came from IPR owners and their representatives. In comments to this questionnaire, respondents described their own experiences with tasting, and indicated that tasting is increasing. IPC representative Kristina Rosette, an attorney with Covington & Burling LLP in Washington, D.C., told P&F parent company BNA as the questionnaire was being formed that the constituency was particularly interested in data proving that tasting was increasing, rather than just that awareness was increasing. The final report cited 78 percent of respondents as stating that the number of tasted domain names incorporating their brands had increased over the past year. "A follow-up question resulted in 34 of 46 respondents (74%) confirming that tasting had increased in real terms (as opposed to only a perceived increase due to increased awareness of domain tasting)," the report said. Current Mechanisms Problematic Responses to the IPC questionnaire also indicated IPR owner frustration with current mechanisms, such as the UDRP, to combat tasting. Traditionally, IPR owners turn to the UDRP or to judicial proceedings to solve domain name disputes. However, respondents identified the AGP as a hindrance to such formalized resolution in instances of tasting. If the disputed name was dropped within the allotted five days, most respondents said that they were virtually without recourse. Preparing a formal challenge generally takes more than five days, they said. The IPC reported that almost two-thirds of IPR owners who said they knew about tasting of their own brands had not taken any action. "The primary reasons for not doing so were because the domain name was deleted during the AGP and doing so was costly given the number of domain names," the report said. The report went on to say that the amount of time required to prepare and file complaints was another factor: "47% of respondents reported spending four or more days for UDRP complaints, and 70% reported spending four or more days on judicial complaints." "The great majority of respondents [in the IPR category] do not view existing enforcement mechanisms such as the UDRP and judicial proceedings as effective against domain tasting," the report concluded. Possible Solutions Ranked The general questionnaire asked respondents to vote for possible tasting solutions. Those possibilities were: (A) eliminating the AGP; (B) making the ICANN annual transaction fee (currently 0.20 USD per year) applicable to names deleted during the AGP; and (C) imposing registry "excess deletion fees" charged to registrars for disproportionate deletes. The questionnaire also provided respondents space to provide their own solution suggestions. "Option A" won 64 percent of the vote; "Option B" won 10 percent, "Option C" won 14 percent, and 12 percent said no proposed options were desirable. On the whole, IPR owners supported the general questionnaire's proposed drop of the AGP. The Coalition Against Domain Name Abuse, an IPR representative, urged that dropping the AGP would curb tasting without harming anyone. "Eliminating the AGP will create an Internet where abusive practices in the name space are less frequent. All named categories would benefit from this," CADNA said in comments. Though most respondents agreed that curbing abusive practices would benefit all categories, there was no clear consensus that eliminating the AGP would best facilitate this result. According to the report, those who objected to option A did so because of the AGP's perceived benefits. The AGP was initially built into the registration process as a way for registrants to correct registration mistakes, and many responses indicated that this use is still important. Nine percent of respondents to the general questionnaire said that they had requested a deletion of a domain name during the AGP for a legitimate purpose. In addition to correcting typographical errors, the registrar community identified four perceived benefits of the AGP: * using a cart "hold" system to provide access to names; * mitigating fraud impacts; * monitoring, testing, and development of registrar provisioning, production, and merchant gateway systems; and * addressing situations of buyer's remorse. GoDaddy, a major registrar in the .com domain, said in its comments that eliminating the AGP may cause unintended harm, as all benefits would be lost. "GoDaddy uses the AGP to correct mistakes based on what we determine to be legitimate requests and to remove domains that we determine have been registered fraudulently," GoDaddy said, adding that 90% of its AGP deletes were due to fraud detection. GoDaddy recommended an approach that would curb AGP abuse while still permitting legitimate uses, such as adding a fee. "Even eliminating the AGP will not stop tasting entirely. However, if there is some cost associated with it those who want to taste will have to at least give more actual thought to what they are doing instead of the indiscriminate activity we see in growing volumes today," GoDaddy said. Next Steps The report represents the final fact-finding efforts of ICANN's domain tasting group, and makes no policy recommendations. The findings will be submitted to ICANN's policy-making body, the Generic Names Supporting Organization. The GNSO will take the findings into account as it decides whether to initiate a policy development process on the tasting issue. At its meeting at the upcoming ICANN meeting in Los Angeles, the GNSO will either decide to proceed with a PDP, or will decide that more studies need to be undertaken. In the event that the GNSO opts for a PDP, the report offers two specific areas for GNSO focus. First, the GNSO should review and asses all the effects of domain tasting that have been identified. Second, the GNSO should judge whether the overall effects justify measures to be taken to impede domain tasting. If the answer to this second question is "yes," the tasting group asks that the GNSO consider the impacts of potential measures on the constituencies, and recommend measures to apply in order of priority in view of their overall effect. The tasting group's report, with links to the comments received, is available through ICANN at <http://gnso.icann.org/drafts/gnso-domain-tasting-adhoc-outcomes-report- final.pdf>.