Comments to the New gTLD Program and Process

["Aimee Nolan" <Aimee.Nolan@xxxxxxxxxxxx>]

Dear Mr. Twomey and Mr. DengateThrush:  
 
W.W. Grainger, Inc, ("Grainger") is the leading broad line supplier of
facilities maintenance products serving businesses and institutions in
the United States, Canada, Mexico and China.
 
Grainger is pleased to submit the following comments related to the
Guidebook and the new TLD program.  
 
Introduction
 
Although ICANN is firmly committed to implementing its new TLD program
in 2009, ICANN has failed to make a compelling case for or provide
sufficient evidence of demand for new TLDs. 
 
In fact, ICANN appears to be moving to the contrary of existing
evidence - despite the existence of 21 TLDs, dot-com remains the favored
extension.  Furthermore, based on conversations with a number of
companies, we understand that many will likely only apply for new TLDs
for primarily defensive reasons, and only a few may do so to support
their Internet marketing initiatives.  With the burden of proof on their
side, ICANN has fallen short of proving the wisdom of its decisions.
 
Even if a demand for new TLDs does exist, ICANN has not provided
evidence that now is the time to be launching such a costly and
expansive initiative.  After all, there is no dispute that we are in the
midst of a worldwide recession, where businesses, government agencies,
and consumers are experiencing mass lay-offs, bankruptcies and budget
cuts, and all are limiting non-essential spending.  In the face of this
current climate, ICANN should reconsider its decision and conduct
broader, global studies to test its assumptions regarding the economic
demand for these new TLDs.  These studies should also include
examinations of the potential impact of such a widespread launch on
brand owners, Internet users and the economy as a whole. Depending upon
the results of such studies, it may be appropriate to scale back the
launch of the new TLD program initially, such as launching only those
IDN or geographic based TLDs that are supported by a significant
community demand.  
 
The Application Process
 
It appears that no information regarding the applied-for TLDs or their
applicants will be available until after the close of the application
submission period.  Since this information could be a deciding factor
for a company considering whether or not to participate in the TLD
launch, it should be made available from the onset of the process. 
 
The Applicant Guidebook leaves much to be desired regarding the details
of the steps of the application process.  For example, potential
objectors are given little information as to the timeframe for filing
objections- there are just references to the filing periods beginning at
the end of evaluation phases.  Furthermore, the grounds for objection
are poorly defined, which would make it difficult for a potential
applicant or potential objector to predict the success of their
application or objection, respectively. 
 
Application Costs
 
There are several clarifications that need to be made within the
Guidebook regarding the costs of the application process:
 
First of all, the additional fee of $100 to access the applications
system should have been built in to the application fee or should be
waived for those submitting an application. In other words, those not
submitting an application, but wishing to access the system, should be
charged the $100 access fee.  It is also unclear as to whether an
applicant wishing to submit multiple applications for different TLDs
will be required to pay the $100 for each application or if this is a
one time fee.
 
Secondly, clarification needs to be made regarding the appointment of
experts in the objection process.  The Guidebook states that a panel
"may appoint experts to be paid by the parties," but it does not state
that the panel will inform the parties of this appointment nor of the
cost.  This could be a significant cost and needs to be disclosed to the
parties prior to appointing such experts.
 
Thirdly, there needs to be more information in relation to possible
refunds for withdrawn applications.  What are the "certain cases" in
which a refund is available?  A schedule of the prorated refunds should
be provided in the Guidebook prior to the application process launch not
after as currently stated in the Guidebook.
 
Finally, the prevailing brandholder in a dispute should not experience
any fees or costs in protecting their brand during the Dispute
Resolution Proceeding.  The Guidebook should be revised to provide that
a prevailing party in any dispute resolution proceeding will be
reimbursed for all of their costs and expenses, (such as attorney fees
and filing fees).  According to the current draft of the Guidebook, only
some of the filing fees are refunded to the prevailing party.  
 
Brand Abuse is Expected to Grow Exponentially in the New TLDs


We would prefer that the new TLD launch be delayed until basic
safeguards are adopted to protect against brand abuse.  The current
Guidebook gives little or no protection for brandholders.
 
Assuming that the new TLD program proceeds, ICANN should adopt better
safeguards against the systemic brand abuse that has been so widespread
throughout many of the current TLDs.  While brandholders protect against
domain name abuse primarily through UDRPs and defensive registrations,
this approach is no longer reasonable when faced with potentially
thousands of new TLDs - it is not feasible for companies to increase
their legal expenditures to correspond with the rising number of TLDs. 
 
ICANN should recognize that the UDRP is no longer an effective remedy
for brandholders.  The cost, resources required and associated delays
render the UDRP impractical and an undue burden upon rights holders.  As
reported by MarkMonitor in its Summer 2008 Brandjacking Index*, 30 of
the most popular brands experienced a weekly average of over 400,000
instances of cybersquatting targeting their brand.  We believe that this
number will increase exponentially when hundreds or thousands of new
TLDs are available. 
 
The effort and resources that are going into developing the new TLD
launch should be put towards developing viable and effective solutions
to combat current online abuse.  If ICANN adopted better safeguards
against brand abuse, cybersquatting and domain warehousing, there would
likely be a significant number of domain names available under the
current TLDs to abolish the need for additional TLDs.
 
Another cause of concern is that nothing in the Guidebook assures that
ICANN will police the new TLDs for compliance with the intended use of
the TLD as outlined in the initial application.  There is also no
information on the consequences for using the TLD for a different
purpose from that which was stated in the application.  Ensuring
compliance should be ICANN's job not the job of brandholders or
consumers.
 
New Tools to Protect Against Brand Abuse Should be Adopted


Many brandholders view sunrise registrations as a fee shifting exercise
- a way to have brandholders recoup a registry*s investment in launching
a new extension.  Brandholders who are concerned about domains
containing their brands falling into the wrong hands may defensively
register names in a sunrise, and with this turnout, the registry often
claims a market demand for the extension and a successful sunrise
launch. Instead of perpetuating this, ICANN needs to consider innovative
new ways of dealing with brand abuse that shifts the costs of
infringement away from the brandholders whose rights have been
systematically abused and disregarded over the last few years.
 
We were encouraged by Paul Twomey*s opening remarks in Cairo, which
stated that ICANN would like to consider innovative ways of addressing
the needs of the IP community, including the creation of an ICANN
sanctioned rights database or clearinghouse, where rights holders could
submit evidence of their rights (*IP Registry*).  Such a tool could be
utilized for purposes beyond sunrise periods.  For example, the IP
Registry could be used for blacklisting purposes, at the top level
(i.e., .ibm) and at the second level (i.e., ibm.web).  If a TLD
application conflicts with a name on the IP Registry, the rights holder
should be notified immediately and given the opportunity to file its own
TLD application or seek other legal redress. For these potentially
infringing applications, ICANN should verify the applicant*s background
and motives, and approve only non-infringing or non-commercial uses.  If
any applicant is approved for a non-infringing use, ICANN should require
strict compliance to the approved uses to protect the rights of the
brandholder.  For second level registrations, ICANN should mandate a
notice/take down procedure if the domain name is used in a manner that
infringes on a name that is on the IP Registry, or require WHOIS
verification and prohibit proxy or anonymous registrations for
registrants intending to register a domain name conflicting with a name
on the IP Registry.  These suggestions would provide a more
cost-effective means of dealing with brand abuse in the new TLDs, and
should discourage abusive registrations and abusive new TLD applicants.

 
Commitment to Publicly Accessible, Free and Accurate WHOIS


The Guidebook contains few requirements related to WHOIS.  Central to
the concerns of brandholders is the need for a free, accurate, and
publicly available access to WHOIS, to quickly identify the registrant
of abusive domain names.  Given the industry-wide problems related to
access to WHOIS, and the proliferation of inaccurate WHOIS, we believe
that ICANN should evaluate the applicant*s commitment to maintaining and
enforcing WHOIS requirements.  In addition, applicants should be
encouraged to maintain centralized or *thick* WHOIS databases, and adopt
additional WHOIS requirements.  For example, ICANN could inquire whether
an applicant intends to allow proxy or anonymous registrations, and, if
so, whether the applicant plans to require the disclosure of the *true
registrant* upon request by a brandholder protecting its rights, or
escrow such proxy/anonymous data.  This inquiry is appropriate because
continued access to WHOIS is essential to protect the stability and
security of the Internet and to maintain confidence of consumers in the
integrity and safety of eCommerce. 
 
Dispute Resolution Decisions Should be Binding on ICANN


Under the Guidebook, ICANN has proposed allowing dispute resolution
service providers (DRSPs) such as WIPO to evaluate string contention
disputes, including disputes regarding whether a string violates the
legal rights of others.  We are supportive of this process, but believe
that a decision from a DRSP should be final and binding on ICANN, rather
than be viewed as an *expert determination* to be considered by ICANN as
a factor in the evaluation of the TLD application. 
 
Conclusion
 
We are deeply concerned about our ability to protect our company and
our customers from additional forms of online abuse, such as fraud,
phishing, counterfeits, and identity theft in a newly expanded space. 
Registries have access to core Internet infrastructure components, and
based on the deep pockets cyber criminals appear to have and their
proven ability to find and exploit loopholes in ICANN policies and
procedures, this would amount to giving the inmates the keys to the
prison.  We urge ICANN to carefully consider additional safeguards
against illegal online activities in the new TLDs.   
 
Respectfully submitted,
Aimee M. Nolan
Assistant General Counsel
W.W. Grainger, Inc.
100 Grainger Parkway, B4.T56
Lake Forest, IL  60045-5201
Phone:  847-535-1047
Fax:  847-535-9243