Comments from DOTZON on the TMCH "Strawman Solution" Proposal

["Katrin Ohlmer" <katrin@xxxxxxxxxx>]

Dear ICANN,

 

we are a Berlin-based company focused on consulting for new top-level
domains for cities, regions and companies. We have been active in ICANN
since 2005, and are stewarding more than 20 new TLD applications through the
ICANN process. These comments are submitted on behalf of DOTZON. 

 

We welcome the opportunity to provide public comments on this proposal, and
thank the people who have developed them. However, we have some concerns
with both the process and substance of the ‘strawman’ proposal. 

 

1          Process

 

Process for bottom-up multi-stakeholder discussions

It is unclear to us what the precise relation of the strawman proposal to
the ICANN policy-making process is, or what the status of these public
comments is. As the proposal was developed in private and amongst a small
group of stakeholders, we - as well as many other stakeholders - have not
had the ability to participate in the discussions or to study the
transcripts and learn how this proposal was elaborated. Much of the proposal
seems to focus on benefits for rights-holders, many of which have been
discussed extensively during the development of the New gTLD program from
2007-2010, including dedicated working groups such as the IRT and STI. As a
result of these discussions, rights-holders have been granted extensive
enhancements to rights protection mechanisms in the new gTLDs as compared to
existing gTLDs. It is difficult, without the benefit of an open process, to
see how these proposals could have been developed to also benefit all
stakeholders including registries and registrars. While we appreciate the
efforts of the group who developed this proposal, we are concerned that a
somewhat narrow set of interests was represented. For example, no one
concentrating largely on community-based TLDs was included.

 

Process for changes to the Applicant Guide Book

We understand that the Applicant Guide Book is not final and subject to
amendments. However, material changes to the Applicant Guide Book affecting
applicants’ business cases should be discussed with applicants (see
Applicant Guide Book, page 6-7, 14: “In the event that Applicant has
completed and submitted its application prior to such updates or changes and
Applicant can demonstrate to ICANN that compliance with such updates or
changes would present a material hardship to Applicant, then ICANN will work
with Applicant in good faith to attempt to make reasonable accommodations in
order to mitigate any negative consequences for Applicant to the extent
possible consistent with ICANN's mission to ensure the stable and secure
operation of the Internet's unique identifier systems.” 

 

Any amendments to the current version of the Applicant Guide Book therefore
have to account to the multi-stakeholder model as well as the amendment
clause in the Applicant Guide Book.

 

2          Substance

2.1       Claims 1 Extension

The extension of the period for Trademark Claims from 60 to 90 days for
Claims 1 goes against fully discussed and agreed GNSO policy. We do not
raise this point simply to say the issue should be considered closed, but to
point to the delicate balance of interests and effectiveness already
achieved. The 60-day period is the consensus of many different stakeholders
because it balances the needs and interests of rights-holders, registrants
and the varying business models of different registries. 

 

Community-based TLDs will suffer particularly from a further extension of
the claims period. As community-based TLDs already limit eligibility for
registration – for example, to individuals or businesses in Berlin for dot
BERLIN or to environmental organizations for dot ECO – these TLDs expect to
receive very few sunrise registrations. Most registrations will take place
in Landrush/GA. Extending the waiting period means delaying for a further
month the ability of these TLDs to generate revenue. Registry applicants
have endured considerable delays already, and have generated business and
revenue modeling in good faith, based on well-understood timelines.
Introducing a further month of revenue delays may severely disrupt
applicants’ financial planning, at this late stage. It is a disproportionate
and unbalanced measure that only harms new registries. 

 

We note the absence of factual data supporting this further extension of a
rights protection mechanism in a way that benefits a single set of
stakeholders. No information or data is provided to indicate how the closed
group of individuals that generated this proposal could have balanced the
conflicting financial interests of all stakeholders. As this proposal
creates demonstrable financial harm to some applicants, particularly those
with constrained registrant sets, and is being introduced long after the
required financial and business modeling have been finalized, it is
disappointing to see a proposal that takes no account of the full range of
interests. 

 

The Claims 1 proposal illustrates clearly how a failure to follow the
multi-stakeholder process creates unbalanced policy. Initially, to balance
the interests of all stakeholders, the Special Trademark Issues Review team
and the GNSO Council decided that there should be either a sunrise or a
trademark claim, but not both. This proposal has already been amended once
to implement both mechanisms as mandatory, sunrise and trademark claims
phase. Further extending the Claims 1 period so late in the process goes
against hard-won community-wide compromises based on solid information and
evidence. The Claims 1 period should not be extended further.  

 

 

2.2       Addition of Name Variations

 

ICANN establishes new global IP right with addition of name variations

The inclusion of up to 50 variations on a name is a broad increase in rights
protections that has a serious impact on registries and registrars. We can
envisage cases when variations may be legitimate but implicate the TMCH
record of a different trademark holder. This is particularly an issue in
predominantly non-English-language registries, where many variations on
words or trademarks in other languages may be perfectly legitimate
registrations. Extending the TMCH to variations of trademarks would de facto
lead to a new global IP right which is out of the scope of ICANN. There may
be cases when variations could be included, but this should be on the
discretion of the registry, and not mandatory.

 

Registrars as stewards for rights-holders?

The addition of names variations imposes new obligations on registrars.  In
the many and inevitable disputes it will create, it would be the registrar
that must deal with registrants who feel their rights have been wrongly
curtailed. It does not appear from the published materials that any thought
has been given to the financial and reputational costs to registrars and
registries. No modeling appears to have been done on those costs, although
the burden may be so heavy as to impact business modeling figures submitted
to ICANN by applicants. 

 

As well as raising operating costs to operationalize the measure and deal
with disputes, this amendment would prevent many legitimate registrations,
harming registries, registrars and registrants. Registrants will not risk
registering many legitimate names because of the perceived threat that they
might infringe another rights-holders’ mark(s). 

 

As with other aspects of this proposal, it is difficult to see how these
measures could have been arrived at by a balanced process based on facts.
Put simply, registrars are not and should not be made to be the trademark
police for trademark owners.

 

2.3       Limited preventative registration

The proposal to prevent registration at the second level of “character
strings previously determined to have been abusively registered or used” is
impractically broad. Registries cannot be expected to police this and
achieve the necessary balance with registrant interests and effective
business methods. No thought seems to have been given to the onerous
business processes that would be required to implement this measure.  As a
result, this proposal is disproportionately burdensome to new gTLD
registries and registrars and would lead to negative material impacts on the
business cases of applicants.      

Regarding the IPC/BC proposal for ‘limited preventative registrations’, we
understand from the CEO’s letter to the GNSO Council on 4 December that
“there was not support among non-IPC/BC participants for solutions to the
issue of second level defensive registrations among the participants in the
TMCH meetings”.
(http://gnso.icann.org/en/correspondence/chehade-to-robinson-04dec12-en.pdf)
We also do not support further, burdensome mechanisms for second level
defensive registrations. These questions have been discussed and dismissed
quite clearly during the STI process, and in public comments on the draft
Applicant Guide book. It is clear that there is no community-wide support
for these measures. 

 

2.4      Trademark protection in incumbent gTLD Registries

This proposal would put new gTLD registries at a disadvantage to incumbent
registries. If these further trademark protections are so crucial, the
community should ask that they should also apply to incumbents on the medium
term;  especially since current statistics on trademark infringement show
that many disputes occur in .COM. Incumbent registries will continue to have
many more registered domain names than in the new gTLDs for some time to
come. 

 

 

3          Next Steps

Mitigation Measures for Late Policy Changes 

Overall, we do not agree with the view that these amendments are purely
“implementation” of the Applicant Guide Book, rather than “policy”. Since
the proposed amendments will lead to increased costs for registries and
registrars and serious business impacts on them, we expect ICANN staff,
together with all applicants, to develop mitigation measures for these
amendments, according to the rules of the Applicant Guide Book before
implementing any substantive changes.

 

Transparent and inclusive process & communication

We respectfully request that ICANN staff ensure all future discussions on
this and other gTLD matters are conducted openly and transparently, and that
– if selection is deemed necessary to keep the discussions practical – the
participants are selected by a transparent process. The participation issue
particularly affects new applicants whose interests are not yet fully
articulated in the GNSO constituency structure, or who have application
types that are considered outside of the norm, e.g. community or geo-TLDs.
There is a wide range of essential expertise that needs to be fed in to
future discussions, and we are eager to assist in providing a broader
cultural, linguistic and business perspective. We also request that any
discussion with selected participants will be available for broad, remote
participation and a transcription be published on a short notice.

 

Unclear next steps

It would be helpful to clarify what the status of public comments is. We
have aimed to be as constructive and helpful as possible in our comments,
but are still unclear on how the ‘strawman’ proposal might be approved or
further amended, whether by the GNSO Council’s input or via staff action. As
there seems to be a growing consensus that at least parts of the ‘strawman’
proposal are policy, and not simply implementation, are further PDPs
required? We particularly do not wish to see any further delays to the new
gTLD launch. 

 

ICANN to publish timeline and set of actions

To this end, to make sure that all of the community can constructively
participate in future processes, a published timeline and set of actions
would clarify matters. We appreciate that staff are trying to be responsive
to parts of the community, but it is in everyone’s interest for this process
to have a clear schedule and set outcomes. As well as managing staff’s and
the community’s workload, this would help to avoid the perception that some
groups will always want ‘another bite’.

 

Kind regards

 

Katrin Ohlmer

Managing Director

 

DOTZON GmbH - incubating name spaces
Akazienstrasse 2
10823 Berlin
Germany